TOKYO -- Nissan Motor is set to build a giant electric vehicle battery plant in the U.K., pledging 1 billion pounds ($1.4 billion) of investment together with a Chinese battery company and the local city council as it strives to meet its zero-emission ambitions.
Nissan's tie-up with Envision Group comes as global automakers rush to secure supplies of batteries, the single most expensive electric vehicle component, to satisfy growing demand in Europe. Envision this week also announced plans for a 2 billion euro ($2.4 billion) plant in France with Nissan's alliance partner Renault.
"This is a strategic, transformational project," said Nissan Chief Operating Officer Ashwani Gupta on Thursday during a visit to the company's Sunderland plant in northern England. "It will support research and development here in the United Kingdom, help suppliers to transit to electrification, improve plant competitiveness and uplift the skills of the Nissan workforce even further."
Under the project, dubbed Nissan EV36Zero, Envision's battery unit Envision AESC will allocate 450 million pounds to build a 9 GW capacity factory near its plant in Sunderland, which already supplies batteries for Nissan's Leaf EV. The new plant will power up to 100,000 Nissan EVs a year.
The plant can be expanded to 35 GW with 1.8 billion pounds of investment by the Chinese battery company, a statement said.
Nissan will spend up to 423 million pounds to produce a new electric crossover vehicle in Sunderland, where it already makes the Leaf and the Qashqai crossover sport utility vehicle.
The Sunderland City Council will offer 100% clean energy to the Japanese automaker and its nearby suppliers by setting up as many as 10 solar farms. The project is expected to create 6,200 jobs.
Nissan, which aims to have options for electrified lineup for all its passenger vehicles in Europe by 2023, sold its Automotive Energy Supply Corporation (AESC) electric car battery unit to Envision in 2018, under former Chairman Carlos Ghosn in a bid to cut costs. It retains a 20% stake in Envision AESC.
The Franco-Japanese alliance is among a host of automakers seeking to secure EV batteries. General Motors and LG Chem announced in April they will invest $2.3 billion to set up a battery manufacturing site on the grounds of a GM plant in the U.S., while Stellantis, which owns brands such as Alfa Romeo and Fiat, has two projects in Europe through a joint venture with a subsidiary of TotalEnergies.
Volkswagen -- which backs a Swedish battery company -- and Tesla, meanwhile, are ramping up the production of their own batteries in Germany.
Europe has become a key driver of the growth of the EV market. EVs made up 10% of new cars sold last year, up from 3.2% in 2019, prompted by subsidies and regulatory pressure on gasoline- and diesel-powered cars.