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Reuters, SUNDERLAND, England, July 1 – Nissan Motor Co (7201.T) staked its European electric future on Britain on Thursday, investing $1.4 billion with a Chinese partner to create a massive battery plant capable of powering 100,000 vehicles per year, including a new crossover model. Faced with the most significant technical transformation in a century, the auto industry’s titans are rushing to secure battery supply close to the facilities that will produce the future’s cleaner electric vehicles. Nissan’s support for the 9 gigawatt-hour (GWh) plant solidifies the company’s bet on the United Kingdom, five years after the Brexit referendum threatened to cut off the rest of Europe. Nissan, its Chinese partner Envision AESC, and local government in northeast England are investing £1 billion to generate 6,200 jobs at the Sunderland plant and in British supply networks. Nissan’s decision to construct its new-generation all-electric vehicle in Sunderland, with a new gigafactory from Envision AESC, is a big vote of confidence in the UK and our highly-skilled employees in the North East, according to British Prime Minister Boris Johnson. “This is a watershed point in our electric vehicle revolution, ensuring its long-term viability.” The new plant’s capacity is comparable to that announced earlier this week by Renault (RENA.PA) and Envision in France. Nissan will invest up to 423 million pounds in a new-generation all-electric crossover vehicle at the same factory where the LEAF electric vehicle and the Qashqai crossover SUV are already produced. Britain has committed to restrict the sale of new diesel and petrol automobiles from 2030, as international powers aim to reduce carbon emissions by abolishing the fossil-fuel guzzling internal combustion engine, one of the emblems of 20th Century capitalism. Going electric, on the other hand, is a challenge. THE FUTURE OF ELECTRICITY China dominates the manufacture of electric car batteries and the processing of the essential minerals necessary to make them, such as rare earths, though the US and Europe are progressively catching up. Western leaders, including Johnson, are hesitant to give up hundreds of thousands of automotive jobs, many of which are in politically sensitive areas, in return for importing Chinese batteries. However, unless Britain can develop both battery production and supply networks, it risks losing its four-decade reputation as the most investor-friendly gateway to Europe for top companies looking to export. By 2030, Envision plans to invest an additional 1.8 billion pounds in the battery factory, which would generate up to 25GWh and 4,500 new employment in the area. According to Nissan, the facility has the potential to generate up to 35GWh. Nissan has announced that its new crossover, which is being built in Sunderland and is based on the Alliance CMF-EV platform shared by Renault and Mitsubishi, will be sold to European markets. BREXIT Since the early 1980s, when then-Prime Minister Margaret Thatcher persuaded Nissan executives to locate their plant on a former air force airfield in the northeastern English city of Sunderland, Japan has used Britain as a gateway to Europe. Nissan thrived as British automakers faded away: Thatcher personally opened the plant in 1986 and was photographed behind the wheel of a Nissan Bluebird. The United Kingdom’s Brexit vote – which was particularly high in Sunderland – frightened Japanese investors, but the worst effects of a turbulent no-deal Brexit were avoided. Last year, the United Kingdom and the European Union reached a trade agreement that enabled free commerce of cars, but with a deadly twist about laws of origin: a car must be manufactured in the United Kingdom or the EU for at least 40% of its value to be sold in the EU. From 2027, the rules will increase to 55%, which means that an imported battery, which can cost up to half the vehicle’s showroom sale price, will effectively shut out British carmakers like Nissan from the European market. It was unclear whether the British government had provided any guarantees or incentives in exchange for Nissan’s investment. The government did not respond to a request for comment. Nissan’s Sunderland plant was one of the first in Europe to produce electric vehicle batteries, albeit Envision AESC purchased out Nissan’s part in the joint venture. “Today’s announcement is the result of extensive talks among our teams, and it will significantly speed our efforts in Europe to reach carbon neutrality,” Nissan CEO Makoto Uchida said. John Stonestreet edited the piece. The Thomson Reuters Trust Principles are our standards./nRead More

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