Nissan unveils £2bn investment plan to build two new electric cars in Sunderland

The car maker is preparing to go all-electric in Britain and Europe by 2030

Nissan will build an electric version of Qashqai and a battery-powered Juke along with its electric Leaf in Sunderland
Nissan will build an electric version of Qashqai and a battery-powered Juke along with its electric Leaf in Sunderland Credit: Ian Forsyth/Bloomberg

Japanese car giant Nissan will build two new electric cars at its Sunderland factory and a third battery plant as part of a £2bn investment in net zero.as part of a £2bn investment in net zero.

An electric version of its Qashqai, Britain’s best-selling car last year, and a battery-powered Juke will join the electric Leaf in being built in the North East, the company said.

The move to electrify every model made in the UK comes as Nissan prepares to go all-electric in Britain and Europe by 2030.

Nissan chief executive Makoto Uchida said: “Our UK team will be designing, engineering and manufacturing the vehicles of the future, driving us towards an all-electric future for Nissan in Europe.”

Mr Uchida said he hopes to tackle lagging EV sales by lowering the price of a battery-powered car down to the same level as petrol versions by 2030.

The pace of electric car sales in China, the world’s largest car market where almost a third of new cars are battery-powered, has helped propel the industry into faster action, he said, although other large markets may move slower to ban combustion models

“The speed of the electrification came a bit earlier than what we thought,” said Mr Uchida.

The cars made by Nissan’s 7,000-strong workforce will be supplied by three nearby gigafactories for batteries and green energy from a local wind farm and solar cells.

Prime Minister Rishi Sunak said: “Nissan’s investment is a massive vote of confidence in the UK’s automotive industry, which already contributes a massive £71bn a year to our economy. 

“This venture will no doubt secure Sunderland’s future as the UK’s Silicon Valley for electric vehicle innovation and manufacturing.

“Making the UK the best place to do business is at the heart of our economic plan. We will continue to back businesses like Nissan to expand and grow their roots in the UK every step of the way as we make the right long-term decisions for a brighter future.”

The top candidate to make the battery plant is AESC, owned by China’s Envision, which operates the other two gigafactories, although Nissan is considering competing bids.

Negotiations are ongoing with the UK government over financial help, said Alan Johnson, Nissan’s senior vice president of manufacturing and supply chain, and no final figure has been agreed.

However, other companies seeking to decarbonise like Britain’s two steel mills and JLR have all sought hundreds of millions of pounds, and Nissan is expected to request similar help.

Mr Johnson said: “We’ve got a feel for what we could expect and that’s embedded into our decision making process.”

Much of the assistance could come in the form of cheaper energy, it is understood.

Mr Johnson added: “There’s a few factors to consider,” including demand and regulation. “The real cost is in research and development. Does Nissan want to be investing in money and developing petrol engine vehicles or petrol engine variants of anything, when in our view, it’s clear the end of the tunnel is approaching?”

The announcement comes after Jaguar Land Rover’s owner, India’s Tata, recently elected to build its European battery factory in Britain.

The deals mean Britain’s two biggest car makers will make both electric cars and batteries in the UK. 

Local battery manufacture is seen as crucial to the success of future UK car production.

BMW-owned Mini, the UK’s third-biggest car maker by volume, will receive batteries from its parent company in Germany. However, Toyota, the UK’s fourth-largest car maker, has yet to announce an electrification plan. 

Nissan announced a 20 MW solar farm to power a fifth of its operation and a £1bn gigafactory in 2021, which is due to be completed next year, supplying enough batteries for 100,000 cars.

The Qashqai saw off close competition from the Vauxhall Corsa as the UK’s most popular car model last year.

Nissan opened its Sunderland factory in 1986 and helped popularise Japanese manufacturing and quality control techniques in the UK. Around 6,000 Nissan workers are based in Sunderland, and the company says that it supports a UK supply chain of 24,000 workers.