Nissan announced plans Thursday for a massive battery gigafactory in northeastern England, where it will produce a new electric vehicle as companies and governments shift away from fossil-fuel vehicles.
Prime Minister Boris Johnson called the £1.0 billion ($1.4 billion, 1.2 billion euros) post-Brexit investment at Nissan’s largest European factory, which will create 6,200 jobs, a “major vote of confidence in the UK.”
Envision AESC, Nissan’s Chinese battery supplier, will invest £450 million in the construction of the battery plant, which will run on renewable energy and power up to 100,000 Nissan electric vehicles per year. The facility, which will be built next to Nissan’s Sunderland factory, has been hailed as critical to the UK’s transition away from high-polluting fossil fuel vehicles.
The announcement comes just days after Nissan’s French partner Renault announced plans for an Envision-owned battery factory in France, as global automakers race to meet brisk demand for greener transportation and governments aim for net zero carbon emissions by 2050.
The Japanese automaker will invest up to £423 million in Britain’s all-electric EV36Zero project, with Sunderland City Council contributing to a total investment of £1.0 billion. “This is a watershed moment for Nissan, our partners, the UK, and the automotive industry as a whole,” said Nissan’s Chief Operating Officer Ashwani Gupta, standing next to a line of freshly-assembled Nissan vehicles awaiting final inspections.
Nissan, which had previously warned that a no-deal Brexit would endanger its 35-year-old Sunderland plant, said the new investment will support 6,200 jobs at the Japanese conglomerate and its UK suppliers.
Nissan will create 900 new jobs, while Envision AESC will create 750 new jobs.
“This is a huge step forward in our ambition to put the UK at the forefront of the global electric vehicle race,” said Kwasi Kwarteng, UK Business Secretary. “The cars made in this plant, using batteries made just down the road at the UK’s first at scale gigafactory, will have a huge role to play as we transition away from petrol and diesel cars.”
The UK government, which will host the UN Climate Change Conference in November, intends to phase out the sale of fossil-fuel vehicles beginning in 2030 as part of its efforts to achieve net zero carbon emissions by 2050.
According to Transport & Environment, a non-governmental organization, Europe now has plans to build dozens of gigafactories capable of producing 16.7 million battery-electric vehicles by 2030.
Last week, Volvo and the Swedish startup Northvolt announced a collaboration to build a new battery factory in Europe.
“UK and European carmakers are racing to develop capacity to produce battery electric cars,” said Peter Wells, an auto industry expert.
“Those manufacturers who do not develop BEV (battery electric vehicle) capabilities will simply lose market share,” said a Cardiff University economics professor.
Nissan’s Leaf car launched Britain’s first electric vehicle and battery production in Sunderland in 2013.
More recently, the company has faced a number of challenges, ranging from low demand during the pandemic to the fallout from the arrest of former CEO Carlos Ghosn, who is now an international fugitive after jumping bail and fleeing Japan.
Due to the global chip shortage afflicting automakers, it has postponed the planned summer launch of its flagship new electric Ariya model until this winter. The new all-electric model, announced in July 2020, was initially scheduled to go on sale in Japan in mid-2021, before expanding to Europe, North America, and China by the end of the year.
In the United Kingdom, Lei Zhang, founder and CEO of Envision Group, stated that his company was expanding on its long-standing partnership with Nissan “to make high performance, longer range batteries for electric vehicles affordable and accessible to millions more motorists.”
He predicted that rising demand would result in up to £1.8 billion in future investment and 4,500 new jobs by 2030.
Nissan’s Sunderland plant currently employs approximately 6,000 people and produces 400,000 vehicles per year, the majority of which are exported.