Nissan confirms gigafactory plans in £1bn boost for Sunderland

1 July 2021 | Construction


Nissan has confirmed plans to build a major new ‘gigafactory’ to manufacture electric-vehicle (EV) batteries in Sunderland.

The carmaker said it would partner with its existing battery supplier, Chinese-owned Envision AESC, and Sunderland City Council to invest at least £1bn overall in new production facilities close to its existing car plant. It aims to establish a manufacturing hub focused on EVs and renewable energy named EV36Zero.

Envision AESC is to invest £450m to build the new gigafactory, with an initial goal of 9 gigwatt-hours per year in rated battery capacity. The site has the potential to expand to 25GWh annual output by 2030 via a further £1.8bn investment, Nissan said, and ultimately as much as 35GWh per year. It added that the gigafactory’s “formal planning process is about to begin”.

The potential scale of the project is somewhat larger than was initially reported at the end of May.

Nissan president and chief executive officer Makoto Uchida said the expansion was part of the firm’s goal “to achieve carbon neutrality throughout the entire lifecycle of our products”. He added that the gigafactory would make batteries for energy-storage systems as well as vehicles, and that expertise gained in Sunderland would be shared globally.

The carmaker also confirmed that up to £423m of the overall investment would support production of a new electric vehicle at the plant, yielding 100,000 units a year including exports to Europe. Prime minister Boris Johnson labelled the announcements “a major vote of confidence in the UK and our highly-skilled workers in the North East” and said it would create “hundreds of green jobs and boost British industry”. The scale of any government incentives that may have tipped the balance of the investment decisions has not been revealed.

Batteries for Nissan’s Leaf electric car have been produced since 2013 at a factory in Washington, close to Nissan’s car plant, which has annual capacity of 1.9GWh per year. That existing facility was initially set up by Nissan in a joint venture with Japanese manufacturers NEC and Tokin, but was sold to Shanghai-based Envision Group in 2018.

Envision Group founder and chief executive Lei Zhang said: “Growth in demand [for EVs] could bring future investment of up to £1.8bn, additional capacity of 25GWh and 4,500 jobs by 2030. This will put the North East at the heart of a new EV hub in the UK, collaborating on R&D around the whole battery lifecycle, from storage, to second life use, V2G [vehicle-to-grid] smart charging, and closed-loop recycling.”

As part of the EV36Zero plan, Sunderland City Council is leading an £80m project to deliver a renewable electricity ‘microgrid’, supplied by wind and solar farms with a 132-megawatt generation potential. The council said it aims to bring in private investors to support the project, which will feature a megawatt-hour of energy storage, using second-life EV batteries, to capture excess energy generated during daylight hours to support the grid overnight.

Mike Hawes, chief executive of carmakers’ trade body SMMT, said the UK’s car industry would need “at least 60GWh of gigafactory capacity in this country by the end of the decade” to secure its future as combustion engines are phased out. “We need a Build Back Better Fund to help manufacturing transformation, as well as a plan for charging infrastructure that will assure consumers to make the switch to these vehicles,” he said.

In April, nascent automotive battery supplier Britishvolt announced the acquisition of a site in Northumberland where it plans to begin production from 2023. ISG was appointed as main contractor for that project late last year, in a reported £300m deal, with the contractor’s owner later joining the board of Britishvolt as a non-executive director.

A joint venture between Coventry City Council and Coventry Airport also has plans to build an EV battery gigafactory in the West Midlands.


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