Nissan is to commit to making future electric versions of its two best selling cars in Sunderland.
The Japanese car maker will announce on Friday that its new electric Qashqai and Juke models will be made at the site, helping to preserve 6,000 jobs.
The investment is thought to be in the region of £1bn and will be supported by a government contribution from the Automotive Transformation Fund (ATF). The ATF received a £2bn top-up in the Autumn Statement on Wednesday.
Nissan is the only carmaker in the UK with its own dedicated battery plant located close to the car plant. It is owned by Chinese company AESC with Nissan as its only customer. The battery plant was expanded last year with contributions from the ATF and Sunderland Council, involving about £100m in public money.
Post-Brexit trading rules due to take effect in January next year require vehicles made in the UK or EU to source 45% of their components by value from the UK or EU to avoid a 10% tariff when exported either way. As batteries are the most expensive part of an electric vehicle, some manufacturers in both the UK and EU have said they will be unable to hit that threshold and have called for the requirement to be deferred.
But battery packs for Nissan's two most successful models will be made on-site, in the Chinese-owned plant. Nissan began producing electric Juke and Qashqai cars in the North East last year and has already committed to producing the successor to its Leaf electric car at its factory in Sunderland.
Nissan is exactly the kind of big profitable manufacturer that stands to benefit from the key business tax change that was announced in the Autumn Statement.
Under a policy known as “full expensing”, businesses are able to offset 100% of investment in new plant and machinery against profits. The tax relief, which had been due to end in 2026, was made permanent by the chancellor on Wednesday.
In September, Nissan said it would only manufacture electric vehicles by 2030, despite the government postponing a ban on the sale of new petrol and diesel cars that had been due to come in that year to 2035. The firm's boss Makoto Uchida said at the time it was the right thing to do for its business, customers and for the planet.
— CutC by bbc.com
