Nissan accelerates electric car production

TOKYO (AFP): Japanese auto giant Nissan announced Friday it would invest up to £2 billion ($2.5 billion) in UK electric car manufacturing in northeast England, with the government touting it as a sign of confidence in the sector.

Nissan said it will produce electric models of two best-selling cars, Juke and Qashqai, at its facility in Sunderland, which is its biggest factory in Europe, building on UK net zero plans to switch away from dirty fossil-fuel vehicles.

The carmaker will plough £1.12 billion into UK operations and wider supply chain for research and development and manufacturing of the two new models, it added in a statement.

Nissan will also inject cash into infrastructure projects and the supply chain, including another electric car battery factory, bringing total investment to as much as £2 billion.

The announcement will support its UK workforce of 7,000 employees — and 30,000 jobs in the nation’s broader supply chain.

Sustainability vision

“We have a vision… where Nissan becomes an entirely sustainable company, where our actions have a positive impact on the environment,” said Nissan president and CEO Makoto Uchida in Sunderland.

“We are confirming an additional two new electric vehicle models for production here in the UK (and they) will be future versions of the Nissan icons.”

He added: “With electric versions of our core European models on the way, we are accelerating towards a new era for Nissan, for industry and for our customers.”

Uchida had declared in September that there was “no going back” on the group’s electrification plans as it aims for 98 per cent of European sales to be electric vehicles by 2027.

Britain is looking to take a leading role in the production of electric cars as companies and governments shift away from high-polluting automobiles.

The UK government confirmed Friday that it has awarded £15 million of funding towards a collaborative R&D project for zero-emission vehicles led by Nissan.

Vote of confidence

“This is our largest car plant (and) its future is safeguarded, protecting thousands of jobs and also transitioning to new electric vehicles,” said British Prime Minister Rishi Sunak, speaking to Sky News in Sunderland.

“It’s a huge vote of confidence in the UK and in our automotive industry,” he added. “We’ve just had a track record now of company after company committing to the UK.”

Friday’s news was also welcomed by UK trade union Unite and car industry body the Society of Motor Manufacturers and Traders (SMMT).

“This new announcement from Nissan… underlines Britain’s position as an increasingly competitive location for electric vehicle production,” said SMMT boss Mike Hawes.

“It is tremendous news for the company, its workforce, the region and the UK’s supply chain, which will drive economic growth and decarbonisation across the UK.”

Finance minister Jeremy Hunt had pledged Wednesday in his budget update to invest £4.5 billion in strategic sectors including the auto industry.

Net zero targets

However, earlier this year Sunak softened policies aimed at reaching net zero carbon emissions by 2050, but insisted he was not slowing down efforts to tackle climate change.

The move included pushing back a ban on the sale of petrol and diesel cars from 2030 to 2035, sparking criticism from opposition lawmakers and environmental campaigners.

That still means however that the country’s largely foreign-owned car manufacturing sector must switch to producing fully-electric vehicles.

Nissan had previously stated that a no-deal Brexit would threaten the Sunderland site but committed to its future after the government agreed on a trade deal.

The SMMT has warned that automakers will soon face a damaging 10-percent hike in customs duties on electric cars crossing the Channel.

Britain left the European Union in 2021 after clinching a last-gasp free trade agreement which removed tariffs on cars.

But under the deal, from January 1, 2024, at least 45 per cent of the value of car parts must originate from Britain or the European Union to be exempt from customs duties.

That hits electric carmakers because their batteries often originate from China, despite UK efforts to establish production.