£3bn investment at Nissan will see next Qashqai and Juke become electric cars

Nissan has confirmed that it will build the next generations of the Qashqai, Juke and Leaf at its Sunderland plant, with the Qashqai and Juke joining the Leaf as electric-only cars.
The announcement comes as Nissan confirmed a further £2bn of investment into the Sunderland plant, £1bn of which will go into building the three next-generation EVs. It will secure the employment of the 6,000 staff at the Sunderland plant for the foreseeable future and create more jobs, as well as aiding a supply chain that employs tens of thousands nationwide. The remaining £1bn will go into building a third ‘Gigafactory’ in Sunderland to produce batteries for Nissan electric vehicles; Nissan already has one Gigafactory at the Sunderland site and is currently building a second, which it committed £1bn to in 2021. This brings the total electric vehicle investment at Nissan in the UK to £3bn.

It could seem a risky strategy for Nissan to turn two of the UK’s best-selling cars into electric-only vehicles, but the company is committed to having a UK production line that only produces EVs well before 2030; Nissan will not produce any new internal combustion cars in Sunderland once the current Juke and Qashqai are replaced.
Given that today’s third-generation Qashqai arrived in 2021, its production is likely to end in 2028, although Nissan won’t be drawn on exactly when electric versions of the Qashqai or Juke will arrive. We do know that the next versions of the Qashqai, Juke and Leaf will be based on a trio of concept cars that Nissan has recently shown, though. Namely the Hyper Urban, the Hyper Punk and the Chill Out respectively.

The £3bn investment is part funded by the UK Government, the amount unconfirmed but likely to be hundreds of millions of pounds and taken from the £2bn of Government funding announced by Chancellor Jeremy Hunt this week. That money will aid car manufacturers in switching production to electric vehicles in the UK. £1bn of the total investment will come from Nissan’s battery partner, Chinese firm AESC, which runs the onsite Gigafactories.
Nissan is currently the only manufacturer in the UK that makes batteries for its cars onsite, doing so since 2013 for the Leaf, although Jaguar Land Rover is planning a £4bn battery factory of its own in Somerset. Once all three of AESC's Gigafactories are in place – each one taking up the ground space of 23 football fields – they’ll be able to provide batteries for more than half a million cars per year. Nissan exports 80% of the cars it builds in Sunderland. The company is also investing in renewable energy for the Sunderland plant, planning to make it a "100% renewable microgrid" and aiming for carbon-neutral car production.

In the more immediate future, having large scale battery production in Sunderland will help the company comply with post-Brexit 'rules of origin' import-export tariffs, from January 2024. Under the new rules, at least 45% of the components of a car built in the UK must be sourced from the UK by value, to avoid a 10% tariff being imposed on every exported vehicle. That proportion will rise to 55% in 2027. The battery is by far the most costly component in an electric car, and because the majority of EV batteries come from China, carmakers will struggle to avoid the tariff, which could see the cost of EVs go up by thousands from January.
Speaking at the Nissan factory in Sunderland today, Nissan President Makoto Uchida said: "We want to localise [production] as much as we can. We want stability. There’s a lot of uncertainty when it comes to regulation. When we’re planning out new vehicles, we can see the tariff changes coming in 2024 and 2027. We knew this would happen. "It’s about making the right plans at the right time. Anticipating where we get the parts from. The supply chain is here. We know that if you don’t have local materials, you can’t qualify the car for export."