Japanese carmaker Nissan is set to confirm plans to build a battery “gigafactory” in Sunderland this week, handing a significant post-Brexit jobs and investment boost to the UK’s under-pressure automotive sector.
Nissan is expected to promise to build as many as 200,000 batteries for electric vehicles every year in the UK, in partnership with Chinese specialist Envision AESC.
The site is expected to open in 2024 and produce 6 gigawatt hours (6Gwh) of battery capacity a year, far more than the 1.9Gwh at its existing Sunderland plant but dwarfed by Tesla’s 35GWh gigafactory in Nevada.
A Nissan spokesperson declined to comment on the likelihood of an announcement this week, which was first reported by Sky News.
The UK government has previously held talks with six manufacturers about building electric car battery plants – known as gigafactories – in an effort to buoy up the coronavirus-hit car industry and hit a 2030 deadline for a ban on sales of new petrol and diesel cars.
Ford and the Korean electronics conglomerates LG and Samsung are among the companies that have also had early-stage discussions with the government or local authorities, it is understood.
UK battery firm BritishVolt is aiming to be the first company to open a gigafactory in the UK, at a converted coal power station in Blyth, Northumberland.
But a significant investment pledge from a household name such as Nissan, potentially creating hundreds or even thousands of jobs, is likely to bolster the government’s efforts to show that the UK can attract investment in sectors such as carmaking that have been tipped to take a big hit from Brexit.
Nissan has already lent its support to the government once, after the carmaker endorsed Boris Johnson’s Brexit deal in January.
The company had previously warned that a no-deal scenario could force it to leave the UK altogether.
But, amid assurances from ministers that Brexit would not affect its trade, the company also pressed ahead with a £400m investment to build the new Qashqai SUV at Sunderland, where it also builds the Juke model and its electric car, the Leaf.
It is unclear whether Nissan has been promised financial backing from state resources in return for its continued investment in Sunderland.
Last month, when its gigafactory plans first emerged, the company was said to be seeking “millions” in taxpayer backing.
Its plea comes with the UK automotive sector in a difficult position due to the impact of the coronavirus pandemic.
UK car production slumped to its lowest level since 1984 last year as a result of the economic slowdown, although Nissan overtook Jaguar Land Rover (JLR) as the biggest manufacturer in the British auto sector.
But electric vehicles have provided a glimmer of hope, provided the UK can secure investment in the technology.
In May, energy regulator Ofgem approved a £300m investment spree to help triple the number of ultra-rapid electric car charge points across the country, as part of efforts to accelerate the UK’s shift to clean energy.
While Nissan’s investment is likely to be seized on by the government as evidence that its Brexit deal and industrial strategy are working, Labour’s shadow business minister Ed Miliband will have a chance to question that narrative on Tuesday.
Miliband is among of the speakers at an international summit hosted by the auto trade body, the Society of Motor Manufacturers and Traders (SMMT), in London on Tuesday.
Business minister Kwasi Kwarteng will also speak, as will Thierry Bolloré, chief executive of JLR, the UK’s largest automotive company until the pandemic struck.
A spokesperson for the Department for Business, Energy and Industrial Strategy (BEIS) declined to comment on whether Nissan would announce a gigafactory this week.