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Nissan is betting big on the UK. The Japanese automaker announced on Friday it will make a fresh investment of up to £2bn ($2.5bn) in its British electric car operations. Its timing is opportune.
The cash will be used for upgrades at its Sunderland plant, which already makes Nissan’s Leaf electric car. The plan, which is supported by a slug of UK government funding, is to roll out new EV models and build a third UK battery plant.
The UK has historically been critical to Nissan’s European business. The Sunderland plant, which started production in 1986, is Britain’s largest electric car factory. It has been running two gigafactories — plants that produce gigawatt hour levels of battery manufacturing output — in the country in partnership with battery maker AESC.
Nissan’s shares are up 45 per cent this year. A weaker yen, which gives profits made overseas a boost, contributed to a more than fourfold jump in net profit in the six months to September. It expects a 76 per cent earnings increase for the year to next March. Sales are forecast to reach a record high.
The UK investment comes despite a slowdown in global demand for EVs. Concerns about costs and infrastructure are fuelling political caution. The UK government recently pushed back a ban on the sale of new petrol cars by five years to 2035. That prompted the Office for Budget Responsibility, a fiscal watchdog, to cut its 2027 forecast of EV uptake by more than two-fifths to 38 per cent of total new car sales. There are also concerns about Nissan’s sales in China, where buyers have recently shifted to locally made EV brands over the past year.
Undeterred, Nissan is putting its pedal to the metal. It plans to sell nothing but EVs in Europe by the end of the decade. The EU aims to have at least 30mn electric vehicles on the roads by 2030, up from about 3mn last year. Nissan will benefit from having a large production base in the region.
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