Car manufacturer Nissan are in advanced talks to build a major new gigafactory in Sunderland which will develop EV batteries.

According to reports from the Financial Times and Construction News the plant in Sunderland could provide annual production of up to 20 gigawatt-hours in rated battery capacity – which could power 200,000 cars at the top end of today’s EV marketplace.

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The new plant would increase production capacity in Sunderland tenfold. Batteries for Nissan’s Leaf electric car have been produced since 2013 at a factory in the city’s Washington district, close to Nissan’s car plant. Local production capacity stands at 1.9GWh per year.

The Sunderland battery factory was initially set up by Nissan in a joint venture with Japanese manufacturers NEC and Tokin, but was sold in 2018 to Shanghai-based Envision Group. In November last year, the government’s Innovate UK agency awarded £750,000 to Envision AESC, the Japan-based subsidiary that currently runs the factory, to fund a feasibility study for a new gigafactory in the UK.

At the time, Envision AESC said it had “ambitious growth plans” and was “investigating appropriate locations for future installation of manufacturing capacity, at gigaplant scale, to produce next generation lithium-ion batteries”. It added that its British business unit was undertaking “a detailed study to understand the economic feasibility of expanding current operations in the UK”.

Envision AESC currently runs 3GWh and 2.6GWh battery factories in the US and Japan respectively, plus a 20GWh per year gigafactory in China.

Demand for battery cells has steadily increased not only as demand for EVs has risen, but as the capacity of the batteries fitted to individual cars has increased. At launch in 2011, the Nissan Leaf used a 24 kilowatt-hour battery, while today’s Leaf offers up to 62kWh capacity. EVs sold by rival Tesla offer up to 100kWh.

Earlier this month, Nissan president and chief executive Makoto Uchida told financial analysts that the carmaker planned to “localise [battery] production in key markets” and was working “with authorities around the world”. But he added that discussions were also ongoing about whether to add capacity internally, within the Renault-Nissan-Mitsubishi Alliance, or via external suppliers.

A Nissan spokesman said: “Having established EV and battery production in the UK in 2013 for the Nissan Leaf, our Sunderland plant has played a pioneering role in developing the electric-vehicle market. As previously announced, we will continue to electrify our line-up as part of our global journey towards carbon neutrality, however we have no further plans to announce at this time.”

Last month, nascent automotive battery supplier Britishvolt announced the acquisition of a site in Northumberland where it plans to begin production from 2023. ISG was appointed as main contractor for that project late last year, in a reported £300m deal. The contractor’s owner later joined the board of Britishvolt as a non-executive director.

A joint venture between Coventry City Council and Coventry Airport also has plans to build an EV battery gigafactory in the West Midlands.

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