Japanese car giant Nissan announced on Friday that it would invest up to Β£2 billion in making electric cars in the UK, in what the government called a sign of confidence in the industry.
Nissan said it will produce electric models of two of its best-selling cars, the Juke and Qashqai, at its Sunderland facility in northeast England, its largest plant in Europe, building on the UK’s net-zero plans to move away from dirty fossil fuel vehicles.
The carmaker will plow Β£1.12 billion ($1.4 billion) into its UK operations and wider supply chain for research and development and manufacturing of the two new models, it added in a statement.
This will also trigger further investment in infrastructure and supply chain projects, including another electric car battery factory, bringing the total investment to up to Β£2 billion ($2.5 billion).
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Nissan’s investment will support its UK workforce of 7,000 employees — and 30,000 jobs across the country’s wider supply chain.
Carbon neutrality schemes
“Exciting, electric vehicles are at the heart of our plans to achieve carbon neutrality,” said Nissan President and CEO Makoto Uchida.
“With electric versions of our key European models on the way, we are accelerating into a new era for Nissan, the industry and our customers.”
Uchida said in September that there was “no going back” on the group’s electrification plans, as it aims for 98% of European sales to be electric vehicles by 2027.
The news comes as Britain looks set to take the lead in electric car production as companies and governments move away from high-polluting cars.
The UK government confirmed on Friday that it has awarded Β£15 million in funding to a collaborative R&D project on zero-emission vehicles led by Nissan.
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“Nissan’s investment is a huge vote of confidence in the UK car industry, which already contributes a huge Β£71 billion a year to our economy,” said British Prime Minister Rishi Sunak, who will attend an official announcement at the site later on Friday.
βThis venture will undoubtedly 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.”
Chancellor of the Exchequer Jeremy Hunt pledged on Wednesday in his budget update to invest Β£4.5bn in strategic sectors, including the car industry.
Net zero goals
However, earlier this year Sunak relaxed policies aimed at achieving net zero carbon emissions by 2050, delaying a ban on the sale of petrol and diesel cars by five years to 2035.
This does mean, however, that the country’s largely foreign auto manufacturing sector must shift to producing fully electric vehicles.
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Nissan had previously warned that a no-deal Brexit would threaten the Sunderland site, but committed to its future after the government agreed a trade deal.
But the country’s car industry has warned that carmakers will soon face a damaging 10% increase in customs duties on electric cars crossing the Channel.
Britain left the European Union in 2021 after concluding a final free trade deal, which scrapped tariffs on cars.
However, under the deal, from January 1, 2024, at least 45 percent of the value of car parts must come from Britain or the European Union to be exempt from customs duties.
This hurts electric car makers because their batteries often come from China, despite the UK’s efforts to build production.
Source: AFP