Britain is charging up for a battery cars’ future.
Nissan said today that its Sunderland car plant is secure for the long term as a result of the trade deal reached between the UK and the EU.
It already makes traction batteries next to its Sunderland assembly plant and now says additional battery production will be invested where it has 6,000 direct employees and supports nearly 70,000 jobs in the supply chain and it is the UK’s largest car plant.
Some 70% of the cars made in Sunderland are exported and the vast majority of them are sold in the EU.
Manufacturing the more powerful batteries in the UK will ensure cars comply with trade rules agreed with the EU requiring at least 55% of the car’s value to be derived from either the UK or the EU to qualify for zero tariffs when exported to the EU.
Nissan had warnings last year that if the UK left the EU without a trade deal, the resulting tariffs on cars and components would make the Sunderland plant “unsustainable” so the new negotiated deal has come in Nissan’s favour.
Nissan’s chief operating officer Ashwani Gupta told the BBC in a broadcast interview, “The Brexit deal is positive for Nissan. Being the largest automaker in the UK we are taking this opportunity to redefine auto-making in the UK.
“It has created a competitive environment for Sunderland, not just inside the UK but outside as well.
“We’ve decided to localise the manufacture of the 62kWh battery in Sunderland so that all our products qualify [for tariff-free export to the EU].
“We are committed to Sunderland for the long term under the business conditions that have been agreed.”
On the same day, Nissan suspended one of its two production lines as disruption at ports caused by the pandemic affected its supply chain.
The line produces the Qashqai and Leaf but will resume next week.
Nissan’s decision comes just days after Stellantis, boss Carlos Tavares said that the future of its Ellesmere Port Vauxhall Astra plant depended on the support the UK government was prepared to offer after its decision to ban sales of new petrol and diesel cars after 2030.
“If you change, brutally, the rules and if you restrict the rules for business then there is at one point in time a problem,” he said.
Looking forward, he said it would make more sense to locate an electric vehicle factory closer to the larger EU market.
However, the announcement by Nissan will make it awkward for Stellantis to ask for a UK Government handout to keep Ellesmere Port operating if Nissan can make a success of its larger plant.
It could reflect on the business model and efficiency of Stellantis and Ellesmere Port, which has previously been among the most productive in the former Vauxhall-Opel network of factories across Europe.
There has been no comment from Toyota, which has an engine plant in North East Wales and a car assembly factory outside Derby.
Honda has previously announced its closure of Swindon plant due to future anticipated costs of doing business in Britain.
UK car investment has sharply fallen since the UK voted to leave the EU.
In the five years to 2016 it averaged £3.5bn per year. In the four years since it has averaged around £1bn – a fall of 71%.
The Welsh Government has said it is still talking to BritishVolt about a possible second gigaplant for traction batteries after the company did an about turn on its plans for the first gigaplant and which will now be built in the North East, fairly close to the Nissan plant as well.
Wales is hoping to attract a new battery maker to the Baglan Energy Park as well.
In a report last week, specialist magazine Autocar said that Sunderland makes about 2GW of batteries per year, and Britishvolt will take that figure to 15GW, or enough to make around 250,000 EVs.
In normal times, the UK makes around 1.3 million cars annually, so there is a need to scale up again homegrown production is to be viable beyond 2030.