Last reviewed 1 July 2021

Nissan has announced plans to expand electric car production and build the UK’s largest “giga factory”, boosting electric car and battery production at its factory in in the Northeast.

The £1 billion electric investment programme strengthens motor manufacturing in the UK post-Brexit and secures the future of Nissan’s Sunderland car plant beyond the government’s ban on petrol and diesel sales in 2030.

Commenting on the new project, Prime Minister Boris Johnson said: "Nissan's announcement to build its new-generation all-electric vehicle in Sunderland, alongside a new gigafactory from Envision AESC, is a major vote of confidence in the UK and our highly-skilled workers in the North East".

Around £600 million of the investment will kickstart Nissan’s expansion of electric vehicle production in Sunderland creating over 900 new jobs and over 4500 in its UK supply chain.

The new electric battery plant, built in partnership with Chinese manufacturer Envision, is expected to create 900 jobs at Nissan and around 750 at Envision, with potentially thousands more jobs across the UK supply chain.

Launching the plans today, Business Secretary Kwasi Kwarteng said the investment is a “commitment to the people of Sunderland” and will bring high-skilled jobs, “turbocharging our plans to level up the North East”.

“This is a huge step forward in our ambition to put the UK at the front of the global electric vehicle race, and further proof, if any was needed, that the UK remains one of the most competitive locations in the world for automotive manufacturing.”

The Government has been in discussions with motor manufacturers for some time over plans to support electrical vehicle production in the UK and has provided financial backing of around £100 million for the project, although the Business Secretary would not confirm how much.

Sunderland city council will also invest £80 million to create a “microgrid” of wind farms and PV solar to power a dedicated energy storage facility and support the new energy-intensive factories.

Mike Hawes, Chief Executive of the Society of Motor Manufacturers and Traders (SMMT), said the announcement was "great news for the sector” but warns that under current plans, the UK will have just 12 gigawatt hours (GWh) of battery production when the country needs at least 60GWh of battery plants just to maintain the current size of the industry. By contrast, Germany will have 164GWh capacity by 2025.

According to the FT, the Government has set aside £500 million to encourage investors to back the transition in the UK car industry, though the motor industry has warned the sum is too small compared to the €2.9 billion the EU is making available to its members.