Nissan Plans U.K. Battery Factory, a Lift for Post-Brexit Automaking

The Japanese carmaker will also manufacture a new electric vehicle in England as part of a GBP1 billion investment, partially supported by the government.

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The Japanese carmaker Nissan announced plans on Thursday to build a battery factory near its plant in northeastern England, and to manufacture a new electric crossover S.U.V. there, bolstering the chances that Britain’s auto industry can survive Brexit and the transition to electric vehicles.

Envision AESC, a Chinese-owned company that already provides Nissan with batteries at the assembly plant, in Sunderland, will invest 450 million pounds, or $620 million, in a new so-called gigafactory to supply electric cars made at the site. It is part of a partnership between the two companies since Nissan sold AESC to Envision in 2019.

Domestic battery production is crucial to the future of Britain’s auto industry. Under the terms of Britain’s exit from the European Union, cars made with imported batteries will be subject to punishing tariffs when exported to the continent.

The tariffs will take effect in 2027, only three years before Britain will begin banning the sale of new cars powered solely by gasoline or diesel. The Nissan factory in Sunderland exports 70 percent of its production to the European Union and could not survive without access to that market.

Nissan’s commitment to invest up to GBP423 million to build a new, as yet unnamed electric car in Sunderland also bodes well for the factory, Britain’s biggest auto plant. The factory currently produces the Qashqai subcompact crossover, the Juke compact S.U.V., and the electric Leaf.

“These new models will continue our long tradition of supplying European customers and world markets from the U.K.,” Ashwani Gupta, Nissan’s chief operating officer, said during an event at the factory.

Manufacturing the new vehicle will require 900 new jobs at the Sunderland factory, Nissan said, while the Envision AESC battery factory will create 750 jobs.

Overall, Nissan said the projects were a GBP1 billion investment in the plant. They are also receiving government support, though it was not immediately clear how much. The local government in Sunderland will spend GBP80 million on a microgrid to supply the factories with wind and solar energy.

Boris Johnson, the British prime minister, called the announcements “a pivotal moment in our electric vehicle revolution and securing its future for decades to come.”

After Britain voted to leave the European Union and ended frictionless trade, the future of its auto industry became uncertain just as manufacturers were reorganizing their production around electric vehicles. Honda is scheduled to shut down its factory in Swindon next month and the site has already been sold to a logistics company. The fate of a Vauxhall plant in the northwest of England depends on government support, Stellantis, Vauxhall’s parent company, said earlier this year.

Nissan’s future in Britain has been a continuous test of Brexit supporters’ claims that leaving the European Union wouldn’t cause businesses to flee. Since the Brexit referendum in 2016, Nissan’s investment commitments to Britain have wavered but have been met by hearty guarantees from the government to support expansion at the Sunderland plant, which opened in 1986.

Nissan opposed Brexit, warning that the uncertainty it would cause could discourage future investment. In 2019, the company scrapped plans to build a new conventionally powered S.U.V. in Sunderland and concentrated production of the vehicle in Japan. But government commitments to the company and the new trade agreement with the European Union have encouraged Nissan to expand operations at the plant, protecting jobs in a city that voted overwhelmingly in favor of Brexit.

The Society of Motor Manufacturers and Traders said this week that Britain needs to rapidly increase battery production and add at least 2.3 million charging points by 2030 if it wants to avoid the industry falling into “precipitous decline.”

Late last year, Mr. Johnson said the government would spend nearly GBP500 million over four years on battery production.

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