Nissan will build batteries in UK to sustain Sunderland plant
Localised battery production means Leaf can continue to be built in UK without incurring tariffs at export
Nissan will build EV batteries in the UK in order to comply with the terms of the Brexit deal, and has committed to the future of its Sunderland factory.
Batteries for the top-rung 62kWh version of the Leaf electric hatchback are currently produced in Japan and imported to the UK, while lower-capacity 40kWh units are built at Sunderland. Shifting all production to the UK will mean Nissan avoids incurring tariffs on the 70% of Leaf models built for export under the terms of the Brexit deal, which states that at least 55% of a vehicle's material value must come from the UK or EU to avoid penalties.
Speaking to the BBC, Nissan chief operating officer Ashwani Gupta said: "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."
It has yet to be confirmed whether the decision will create more jobs at Nissan's Sunderland factory, where 6000 people are directly employed in the production of the Leaf, Qashqai and Juke.
Last week, Nissan UK managing director Andrew Humberstone told dealers nationwide that the Brexit deal "finally gives us some certainty and enables us to plan for the future success of our collective operations across the region”. In the event of a no-deal Brexit, Nissan had said it was unable to commit to the Sunderland factory, with the possibility of heavy tariffs making exports financially unviable.
Sunderland was made the central hub of Nissan's European operations last year as part of the company's plan to "leverage the alliance" it has with Renault and Mitsubishi. As part of the strategy, it has been suggested Renault could move production of its Kadjar and Captur SUVs - which share their underpinnings with the Qashqai and Juke - to the Tyne and Wear site.
According to the Financial Times, Nissan could also bring new models to Sunderland. Citing "people familiar with the company's planning", the FT reports that Sunderland is currently running at just over half its potential capacity, and names the new X-Trail and Ariya EV as models that could be produced locally.
Nissan previously scrapped plans to build the X-Trail in the UK in 2019, blaming a drop in demand for diesel and pre-Brexit uncertainty. The company has now said it is "satisfied" with the terms of the deal, and plans to expand its UK output could see the decision on the X-Trail reversed.
News of Sunderland's secured future comes as the Stellantis manufacturing group casts doubt on its ability to keep producing cars at the Vauxhall factory in Ellesmere Port as a result of the UK's 2030 ban on the sale of new combustion-engined cars.
CEO of the newly formed conglomeration Carlos Tavares said earlier this week: "If we’re told that in 2030 internal combustion engines can't be sold in the UK, which we respect as a decision of the country, then we will not invest in combustion engines any more, and we will look to see if there is a business case to invest in other directions."
A decision on the future of Ellesmere Port is expected to be made in the coming weeks.
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*Explainer: What the Brexit deal means for car manufacturers*
*Nissan Leaf e+ Tekna 62kWh UK review*
*Stellantis boss warns 2030 ban could close Vauxhall UK factory*
