Nissan set a new project of battery production

Several media including Reuters reported that Nissan Motor invests $1.4 billion in a gigafactroy with its Chinese partner. As a result, the company expects that a new factory will power 100,000 vehicles per year.

Electrification and other technological advancements are disrupting the automotive industry drastically and rapidly. Nissan Motor is without exception for this trend. Thus, it seems natural that the company secures battery supply close to the factories where they will make new EVs.

Ashwani Gupta, Nissan’s chief operating officer, mentioned, “This project is the demonstration of the renaissance of the British car industry.” In fact, Nissan cast its backing for the 9 gigawatt-hour (GWh) plant. Even though we don’t know any details about guarantees or incentives, Britain has backed this investment. This is because Nissan will invest $1.4 billion. Furthermore, its Chinese partner Envision AESC and local government will create 6,200 jobs at the Sunderland plant and supply chains.

When it comes to new-generation all-electric crossover vehicle, Nissan will spend up to 423 million pounds there. Indeed, it already produces the LEAF electric vehicle and the Qashqai crossover SUV. On the other side, Britain has declared to ban the sale of new diesel and petrol cars from 2030.

China dominates battery production

China dominates the production of EV batteries and the processing of the minerals that need for them. Thus, the production and supply chains of batteries become more crucial for the US as well as Europe.

Envision could invest an additional 1.8 billion pounds in the battery plant to expand generating capacity to up to 25GWh. In addition, the investments add 4,500 new jobs in the region by 2030.

In the report, Zhang Lei, Envision Group founder and chief executive, mentioned “”We also want to build the supply ecosystem in the country. However, you do need critical mass.” He also told “The battery plant could supply other manufacturers and it would be able to export, including to Europe.”

The importance of this plan

Volkswagen and Volvo Cars have already intended to produce batteries by themselves for their own vehicles. In this sense, this Nissan’s plan is not new. Both Nissan and the UK are facing the difficult situation. Thus, they want to move the situation forward through this investment.

When it comes to Nissan, the company is still struggling to fix corporate governance and overcome the aftermath of pandemic. Once Nissan, Renault and Mitsubishi were grouped together, many analysts predicted that they could compete with Toyota and Volkswagen. However, the former chief executive was arrested and the company sold less vehicles in the US market than few years ago. As a result, Nissan made a decision to reduce its production capability and Barcelona plant is an example.

As for the UK, many companies are still wondering if the country suits for production facilities. This is because Brexit increases the uncertainty around the business environment in the UK. However, once Nissan and Envision build a new factory, suppliers will be able to follow the decision. That is why this plan is important for the UK government as well.

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