Nissan will invest $1.4 billion to make EV versions of its best-selling cars at its UK factory

by Joshua Brown
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Electric vehicle investment

Nissan has committed to a substantial investment of $1.4 billion to modernize its manufacturing facility located in northeast England. The objective of this investment is to facilitate the production of electric versions of its two top-selling vehicles, a development that carries significance for the British government in its efforts to stimulate the nation’s struggling economy.

The Japanese automaker currently produces the popular Qashqai and smaller Juke crossover vehicles, which run on gasoline or gas-hybrid technology, at its Sunderland factory, employing a workforce of 6,000 individuals.

Nissan Motor Co. has announced a direct investment of up to 1.12 billion pounds (equivalent to $1.4 billion) aimed at manufacturing electric successors to these two vehicle models. Additionally, this substantial funding will support broader infrastructure initiatives and supply chain enhancements, including the establishment of a new gigafactory for electric vehicle batteries on the same premises, as detailed in a separate government press release.

Prime Minister Rishi Sunak expressed his enthusiasm, characterizing Nissan’s investment as a significant vote of confidence in the United Kingdom’s automotive sector, which contributes a substantial 71 billion pounds annually to the nation’s economy.

The announcement of this investment was accompanied by a visit from Prime Minister Sunak himself to the Sunderland factory. During this visit, he engaged in photo opportunities alongside Treasury chief Jeremy Hunt, in front of a blue Qashqai on the assembly line. He also met with factory workers and received a guided tour from plant staff. This visit coincided with Hunt’s announcement of tax reductions and other budgetary priorities in anticipation of a forthcoming national election next year, occurring at a time when the UK’s economic growth is lackluster and persistent inflationary pressures are impacting consumers.

It is noteworthy that the Qashqai ranks as the UK’s second most popular vehicle this year, while the Juke holds the seventh position. Nissan has also disclosed plans to manufacture the next generation of its longstanding Leaf electric car at this facility.

In 2021, Nissan had initially signaled its intent to produce an electric vehicle at the Sunderland factory, alongside batteries produced next door by the supplier AESC, which is owned by China’s Envision. AESC already operates two gigafactories in Sunderland, and this recent announcement marks the addition of a third.

Nissan’s commitment to electric vehicles aligns with its broader vision of achieving carbon neutrality. As stated by Nissan President and CEO Makoto Uchida, “With electric versions of our core European models on the way, we are accelerating towards a new era for Nissan, for the industry, and for our customers.” The company has set a target to electrify its entire European passenger car lineup by 2030, and Uchida affirmed that this investment signifies a significant step towards realizing that vision.

The future of Nissan’s Sunderland facility had been a subject of uncertainty, both before and after the United Kingdom’s 2016 decision to exit the European Union. Critics of Brexit had voiced concerns that leaving the EU without a trade agreement would negatively impact the UK’s economy, particularly affecting companies like Nissan, which would potentially face tariffs on exports to the EU.

The automotive industry is currently preparing for the implementation of 10% post-Brexit trade tariffs, scheduled to take effect in January. These tariffs have the potential to increase the cost of new electric vehicles by penalizing manufacturers based on their sourcing of components from either the EU or the UK. Nissan, however, possesses the distinction of being the sole automaker in the UK with a dedicated battery production facility in close proximity.

Notably, Nissan’s commitment to electric vehicle production aligns with a broader trend in the UK automotive industry. Other automakers are also transitioning towards electric vehicle manufacturing in the UK, despite Prime Minister Sunak’s decision to extend the deadline for ending the sale of new gasoline and diesel cars to 2035.

For instance, BMW announced earlier this year that it is injecting 600 million pounds into its Mini factory in Oxford, England, with the goal of commencing electric vehicle production by 2026. Additionally, Tata Sons, the parent company of Jaguar Land Rover, is in the process of constructing a 4 billion-pound electric vehicle battery factory in the UK, anticipated to generate approximately 40 gigawatt hours of battery cells annually, potentially supplying half of the UK’s electric vehicle battery demand. Lastly, Stellantis, the parent company of Vauxhall, is allocating 100 million pounds towards producing electric vans and cars in northwestern England.

Frequently Asked Questions (FAQs) about Electric vehicle investment

What is Nissan’s investment in the UK factory about?

Nissan’s investment of $1.4 billion in its UK factory is aimed at updating the facility to produce electric versions of its best-selling cars, the Qashqai and Juke.

How will this investment benefit the British government and the economy?

This investment is a boost for the British government’s efforts to revitalize the economy. It is expected to create jobs and stimulate economic growth in the UK.

What models will be produced as electric vehicles?

Nissan plans to produce electric successors to its gasoline or gas-hybrid Qashqai and Juke crossover vehicles. Additionally, the next generation of the Leaf electric car will also be manufactured at the same facility.

What is the significance of this investment for Nissan’s electric vehicle strategy?

This investment aligns with Nissan’s goal to electrify its entire European passenger car lineup by 2030, marking a significant step in their transition to electric vehicles.

How will the investment impact the supply chain and infrastructure?

The investment will enable wider investment in infrastructure projects and the supply chain, including the establishment of a new gigafactory for electric vehicle batteries at the same site.

What is the broader context of electric vehicle production in the UK?

Nissan is not the only automaker investing in electric vehicle production in the UK. Other companies like BMW, Tata Sons (Jaguar Land Rover), and Stellantis (Vauxhall) are also making similar moves to embrace electric vehicle manufacturing in the country.

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