Nissan Promises Extra BEV Production in U.K.

Thanks to U.K. government pledges of financial subsidies, Nissan commits to investing £1.12 billion ($1.4 billion) into building three battery-electric vehicles at its Sunderland factory.

Investment by the automaker and its partners will see a total funding of £2 billion ($2.5 billion). But Nissan warns a second gigafactory will be needed to join the existing one, being built by its partner AESC, to service the extra output of BEVs.

Currently, Nissan assembles conventional internal-combustion-powered vehicles alongside its BEV Leaf but, after the upgrades from this investment, will switch production to include all-electric versions of its Qashqai and Juke models. The scheme could help preserve the jobs of about 6,000 workers directly in the financially depressed northeastern region plus thousands more across the U.K.

Earlier this year, Nissan's former chief operating officer, Ashwani Gupta, said the nation would struggle to remain competitive with other car-making countries because of higher manufacturing costs, elevated by energy bills and inflation. He followed this up in summer warning the U.K.'s largest car manufacturing plant would be “unsustainable” without a new post-Brexit trade deal on tariffs.

Tariffs due to take effect in January will see a 10% tariff slapped on cars sold between the U.K. and the European Union unless carmakers have sourced at least 45% of their components by value from the U.K. or EU. Automakers on both sides of the English Channel have warned regulators they will struggle to meet the new rules with so much of the expensive battery technology having to be sourced from Asia.

Alan Johnson, Nissan's senior vice president of manufacturing and supply chain, told the BBC's Today radio program that the nation “can be a competitive place for car production, but everything needs to be right. Not just the plant itself but the surrounding environment: energy costs, infrastructure, local government (and) national government support, needs to be right for it to work.”