Nissan commits to EV manufacturing in Sunderland

This significant investment, believed to be around £1 billion, will receive support from the government’s Automotive Transformation Fund (ATF), which recently received a £2 billion boost in the Autumn Statement.

Nissan stands out as the only UK carmaker with a dedicated battery plant near its manufacturing facility. Owned by the Chinese company AESC, with Nissan as its primary customer, the battery plant underwent expansion last year with support from the ATF and Sunderland Council, involving approximately £100 million of public funding.

New post-Brexit trading rules, set to be implemented in January, impose a 10% tariff on cars traded between the UK and EU unless 45% of components are sourced from these regions. These rules aim to protect the European industry from inexpensive imports. With batteries being the most costly component of electric vehicles, some manufacturers in both the UK and EU have expressed concerns about meeting this threshold and have urged for a deferral.

Stellantis, owner of Vauxhall, Peugeot, Citroen, and Fiat, raised concerns in May about the viability of UK operations, citing potential uncompetitive costs in electric vehicle manufacturing. However, Nissan’s Sunderland-made electric Juke and Qashqai models, with batteries produced on-site at the AESC-owned plant, will bypass these tariffs.

Nissan, having already started producing electric versions of these models in the Northeast last year, has committed to manufacturing the successor to its Leaf electric car in Sunderland. The Autumn Statement introduced a permanent "full expensing" policy, allowing businesses to offset 100% of investment in new plant and machinery against profits, benefiting manufacturers like Nissan.

In September, Nissan declared its intention to shift exclusively to electric vehicle production by 2030, aligning with its business, customer, and environmental objectives, as stated by CEO Makoto Uchida. This decision comes despite the UK government’s delay in banning new petrol and diesel car sales from 2030 to 2035.

Amid these developments, the Office for Budget Responsibility, alongside the Autumn Statement, revised its electric car sales forecast for the UK by 2027. The new estimate predicts that electric vehicles will constitute 38% of new car sales by 2027, a decrease from the 67% projected in March.