Nissan announces UK battery factory as part of £1bn Sunderland plan

Nissan has unveiled plans for a large-scale battery factory as part of a £1bn electric investment that secures the future of its Sunderland car plant beyond the UK’s ban on petrol and diesel sales in 2030.

In a move that raises hopes the UK can attract the investment in batteries needed to support its wider motor industry, the Japanese car giant will create more than 6,000 direct and indirect jobs by developing the new facility next to its existing car plant, and promising to build a new electric car at its site.

Nissan’s battery supplier Envision AESC, which already runs a small battery facility in Sunderland, will invest £450m building the plant, which will create 750 roles. 

The carmaker will then invest £423m to make a fresh electric model at its car plant, using batteries from the new facility, in a move generating 900 jobs. The companies estimate this will lead to employment for 4,550 further people within the supply chain.

The development is the first large-scale battery plant to be built in the UK, and comes as governments around the world race to attract investments in the field to support their own automotive industries as they shift from combustion engines to electric power.

To aid the first phase of the project, Sunderland city council will invest £80m to create more power for the site, installing wind farms, solar parks and a dedicated energy storage facility made from second-hand electric car batteries.

The government has also given about £100m of support to Nissan for the project, according to people briefed on the discussions.

Business secretary Kwasi Kwarteng called the investment “a huge step forward in our ambition to put the UK at the front of the global electric vehicle race”.

Nissan chief operating officer Ashwani Gupta called it a “landmark day” for the business.

The first phase of the site will have a capacity of 9 Gigawatt hours, able to produce enough batteries for 100,000 cars a year. If demand for Nissan’s electric vehicles rises sharply, Envision may invest a further £1.8bn to expand the new plant to 25GWh by the end of the decade.

With the UK government phasing out the sale of petrol and diesel models by 2030, carmakers with British plants will need to source batteries and increase electric vehicle production by the end of the decade.

Because of their weight, carmakers tend to buy batteries close to the vehicle plant, meaning that facilities in the UK are needed to maintain production at the current sites that include Toyota, Mini, Vauxhall and Jaguar Land Rover.

Earlier this week the Society of Motor Manufacturers and Traders warned that Britain needs 60GWh of battery plants just to maintain the current size of the industry. In a worst-case scenario, with only one large-scale project in the country, more than 90,000 roles could be lost, it warned. 

SMMT chief executive Mike Hawes said Nissan’s investment is “a real vote of confidence, but is still only one” out of a number that need to happen to safeguard the country’s sprawling network of factories.

“It’s a fiercely competitive industry, and we need more than that,” he added.

British ministers have set aside £500m to encourage investors to back the fast-changing car industry, though the sector has warned the sum is too small compared to the €2.9bn the EU is making available to its members.