LONDON – Nissan will invest $1.4 billion to upgrade its factory in northeastern England to produce electric versions of its two best-selling cars, a boost for the British government as it tries to revive the country’s faltering economy.
The Japanese carmaker makes the petrol- or gas-powered Qashqai hybrid and smaller Juke crossovers at the plant in Sunderland, which employs 6,000 workers.
Nissan Motor Company said it is directly investing up to 1.12 billion pounds ($1.4 billion) to produce an electric successor to the two models. The money will also enable “broader investment in infrastructure and supply chain projects, including a new mega-factory” for electric vehicle batteries at the site, the government said in a separate press release.
Prime Minister Rishi Sunak said: “Nissan’s investment is a massive vote of confidence in the UK car industry”, which contributes £71 billion a year to the economy.
Sunak visited the factory to make the announcement, posed for photos with Chancellor of the Exchequer Jeremy Hunt in front of a blue Qashqai on the assembly line, met workers and was given a tour by staff at the factory. The previous day, Hunt announced tax cuts and other budget priorities ahead of next year’s national election, which come as weak economic growth in the UK and persistently high inflation pressure consumers.
The Qashqai is the second most popular car in the UK this year, while the Juke is seventh. Nissan also said it will produce the next generation of its long-range Leaf electric car at the plant.
The company said in 2021 that it plans to build an electric car at the factory, along with batteries made by supplier AESC, which is owned by Chinese company Envision. AESC already has two huge factories in Sunderland, and Friday’s announcement adds a third.
Electric vehicles “are at the heart of our plans to achieve carbon neutrality,” Nissan President and CEO Makoto Uchida said in a statement. “With electrified versions of our core European models on the way, we are accelerating into a new era for Nissan, the industry and our customers.”
Nissan has set a goal of electrifying its entire European passenger car range by 2030.
“With today’s announcement, we are realizing this vision,” Uchida said at the plant, which temporarily halted production to celebrate.
The future of Nissan’s Sunderland was in question before and after Britain’s 2016 vote to leave the European Union. Opponents of Britain’s exit from the European Union said that leaving the bloc without a trade agreement would harm the British economy because companies such as Nissan would face tariffs on exports to the European Union.
The car industry is preparing for a 10% trade tariff after Brexit, which will come into effect in January. They are threatening to raise the cost of new electric cars by penalizing manufacturers in their markets for not sourcing enough of their components from the EU or Britain.
Many electric car makers will struggle to meet requirements because Europe lags behind Asia in battery production. However, Nissan is the only UK carmaker with a dedicated battery factory nearby.
Nissan joins other carmakers making the transition to electric car production in the UK, even as Sunak delays the deadline to end the sale of new gas and diesel cars by five years, to 2035.
BMW said earlier this year that it is investing £600 million in its small factory in Oxford, England, to start manufacturing electric cars by 2026.
India’s Tata Sons, which owns Jaguar Land Rover, is building a £4bn electric car battery factory in the UK, which is expected to produce around 40 gigawatt hours of battery cells each year, enough to supply half of the world’s electric car batteries. United kingdom.
Stellantis, the parent company of British carmaker Vauxhall, is investing £100m to manufacture electric trucks and cars in northwest England.
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