Nissan to build £1 billion 'gigafactory' for electric cars in Britain

Business Secretary Kwasi Kwarteng welcomes 'once-in-a-generation' green investment

Nissan's chief operating officer Ashwani Gupta announces plans to build a 'gigafactory' for electric cars at the company's Sunderland plant. AFP

Nissan has announced plans to build the UK’s first car battery “gigafactory” that will lead to a massive expansion of its plant in north-east England.

The Japanese car manufacturer said it would build a new all-electric car model next to the Sunderland factory.

The £1 billion ($1.4 billion) battery plant, built in partnership with Chinese battery supplier Envision, would create 900 jobs at Nissan and 750 at Envision, the companies said.

The facility was hailed as key to the UK's transition away from fossil fuel vehicles.

Business Secretary Kwasi Kwarteng said the investment was a “big deal” for the government’s post-Brexit agenda.

“Let’s not forget a number of years ago people were saying Nissan would leave the UK as a consequence of Brexit, and what’s happened is the opposite,” he told BBC’s Radio 4 Today programme on Thursday.

Mr Kwartang refused to say how much the UK government had contributed to the project.

“It would be completely irresponsible for me to go into matters which are commercially sensitive,” he said.

“It’s no secret that across the world that governments are seeking to attract a once-in-a-generation opportunity to build these gigafactories.”

The announcement comes just days after Nissan's French partner Renault unveiled plans for a Chinese-owned battery factory in France on Monday, as global carmakers race to meet booming demand for greener transport and governments target net zero carbon emissions by 2050.

Nissan is to spend up to £423 million on an all-electric vehicle, while Sunderland City Council will help to bring the total amount of investment up to £1 billion.

"This is a landmark day for Nissan, our partners, the UK and the automotive industry as a whole," Nissan's chief operating officer Ashwani Gupta said at the unveiling of the EV36Zero project in Sunderland.

Nissan, which had warned that a no-deal Brexit would threaten its 35-year-old Sunderland factory, said the new investment represents 6,200 jobs at the Japanese group and its UK suppliers.

"This is a huge step forward in our ambition to put the UK at the front of the global electric vehicle race," Mr Kwarteng said.

"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.”

Nissan established Britain's first electric vehicle and battery production at Sunderland in 2013 with its Leaf car.

The company has more recently faced a series of trials, from weak demand during the pandemic to the fallout from the arrest of former boss Carlos Ghosn, now an international fugitive after jumping bail and fleeing Japan.

Nissan has meanwhile delayed the planned summer launch of its flagship new electric Ariya model to this winter over the global chip shortage plaguing automakers.

Announced in July 2020, the new 100-percent electric model was initially supposed to go on sale in Japan from mid-2021, before arriving in Europe, North America and China by the end of the year.

In the UK, Lei Zhang, founder and chief executive officer of Envision Group, said Thursday that his company was building on its long-term partnership with Nissan "to make high performance, longer range batteries for electric vehicles affordable and accessible for millions more motorists".

He said growth in demand could bring future investment of up to £1.8 billion and 4,500 jobs by 2030.