Nissan will invest $1.4 billion in its Northeast England factory to build electric versions of two of its best-selling cars. This decision will boost the British government and assist the country’s economy.
The Japanese automobile giant manufactures the gasoline or gas-hybrid Qashqai and smaller Juke crossover vehicles at its Sunderland factory, which employs 6,000 workers.
Nissan will directly invest up to $1.4 billion or 1.12 billion pounds to make electric models of the two cars. Per the government’s press release, the money will help in the “wider investment in infrastructure projects and the supply chain, including a new gigafactory” for EV batteries at the factory.
UK Prime Minister Rishi Sunak also added to the announcement. “Nissan’s investment is a massive vote of confidence in the UK’s automotive industry,” he said, referring to the automobile industry’s 71 billion pounds yearly contribution to the country’s economy.
The Qashqai emerged as the UK’s second-most popular vehicle this year, while the Juke claimed the seventh spot. Nissan also said it will make the next-generation model of its long-running Leaf electric car at the Sunderland facility.
In 2021, the automobile giant revealed its plans to build an electric vehicle at the site, along with batteries made by supplier AESC, owned by China’s Envision. AESC already has two gigafactories in Sunderland; Ford’s announcement will establish a third factory in the region.
According to Nissan President and CEO Makoto Uchida, electric vehicles lie “at the heart of our plans to achieve carbon neutrality.” He added that with electric versions of Ford’s core European models, the company will head towards a new era for Nissan, for industry, and for our customers.”
Nissan has also set a target to modify its entire European passenger car catalog by 2030 electrically.
The future of Nissan’s Sunderland facility was uncertain before and after Britain decided to exit the European Union. Brexit opponents claimed leaving the union without trade negotiations would negatively impact Britain’s economy since companies like Nissan would have to pay tariffs on exports to the EU.
The automobile industry is anticipating 10% post-Brexit trade tariffs to take place in January, threatening the increase in costs of new EVs by making the conditions difficult for manufacturers in their respective markets for insufficient component sourcing from the EU or Britain.
Furthermore, various EV makers will find it challenging to satisfy the requirements because Europe trails behind Asia in battery production. However, Nissan is the only car manufacturer in the UK that has a dedicated established battery plant nearby.
Nissan also joins other automakers transitioning to EV production in the UK, despite Rishi Sunak pushing back deadlines to end the sale of new gas and diesel cars by five years to 2035.
Earlier this year, BMW announced plans to invest 600 million pounds into its factory in Oxford to start building electric vehicles by 2026.
India’s Tata Sons, owner of Jaguar Land Rover, is also making a four billion-pound EV battery plant in the UK, which is expected to produce roughly 40 gigawatt hours of batteries yearly, enough to provide EV batteries to half the UK’s cars.