Nissan 'in talks to build huge UK battery factory'

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Nissan's Sunderland plantImage source, Getty Images
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Nissan's Sunderland plant employs about 7,000 people

Car giant Nissan is reportedly in advanced talks to build a huge electric car battery plant in the UK.

The Japanese company would not confirm a Financial Times story about the plans for a gigafactory, but pointed to its Sunderland plant's crucial role in producing electric vehicles.

The FT said Nissan wants the UK to be its main electric hub outside Japan.

The government said it was committed to attracting battery factories, but did not comment on Nissan specifically.

The FT said that the factory, which would be built on the existing Sunderland site, would produce 200,000 batteries a year and support thousands of jobs.

Electric car sales are expected to soar in the next few years as the UK gets ready to end the sale of new petrol and diesel vehicles by 2030.

The measure is part of a 10-point "green industrial revolution" plan announced by Prime Minister Boris Johnson in November last year.

In a statement, Nissan said: "Having established EV [electric vehicle] 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."

The government is surprised that anyone is at all surprised that they are talking to Nissan about the development of a battery factory in the North East.

The government has already been clear it has an ambition to build at least one giga factory in the UK this parliament and it is conducting regular talks with many different parties - including Jaguar Land Rover and newcomer British Volt.

Some cynical voices in the industry say that Nissan is a past master at getting the government to help pay for stuff they were going to do anyway, and this is no exception. Nissan already announced it was moving additional production to the existing plant in the North East that they used to own.

Although Nissan sold it to AESC, Nissan effectively controls it as its only customer. For once the government may be able to play Nissan at its own game. Get Nissan to help pay for something the government has promised to do anyway.

The talks will centre on how much bigger the battery factory needs to be if manufacturers other than Nissan are to have access to the batteries it produces.

A spokesperson for the Department of Business, Energy and Industrial Strategy (BEIS), said the government was determined to make the UK a home for the mass production of electric car batteries.

"We are committed to ensuring the UK continues to be one of the best locations in the world for automotive manufacturing through a major investment programme to electrify our supply chain, create jobs and secure a competitive future for the sector," the spokesperson said.

Other government sources told the BBC that although there are talks with Nissan, any decisions on battery factories are "nowhere near" being made.

The government is also in talks with other companies about building gigafactories.

It is likely that, as part of the negotiations, Nissan is exploring possible state subsidies to help finance building the plant.

Last week, reports that Tesla boss Elon Musk had visited the UK sparked speculation that the billionaire was looking for a site to build his own gigafactory.

And last month, start-up Britishvolt said it had bought the site of the former Blyth Power Station in Northumberland with the intention of turning it into a gigafactory.

Britishvolt, which hopes to be producing enough batteries for 300,000 electric cars a year by 2027, said it was "encouraged" by reports of potential further gigafactory investments in the UK.

"It is also positive to understand that the UK government is taking battery production seriously, on the road map to net zero, and are backing this up by providing funding in line with that provided in the EU for its battery industry development," the company said.

Plans are also under way to build a gigafactory in Coventry, next to the city's airport.

A joint venture by the airport and the city council is seeking to raise £2bn for the project, working with local carmakers and battery suppliers to secure the investment.