The UK Government has confirmed a £1 billion investment in a new gigafactory to be built by AESC in Sunderland, a move set to multiply the country’s electric vehicle (EV) battery production capacity sixfold and support 1,000 new jobs.
The large-scale lithium-ion battery manufacturing facility will produce enough cells to power up to 100,000 electric vehicles each year, significantly addressing a key supply chain gap as Britain accelerates its transition to zero-emission transport.
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The project is backed by both public and private funding, with £680 million in loans secured through guarantees from the National Wealth Fund and UK Export Finance. Participating banks include Standard Chartered, HSBC, SMBC, Société Générale, and BBVA. A further £320 million will be provided through private equity and other commercial channels, including £150 million in direct government grants via the Automotive Transformation Fund.
“This investment is a milestone in the UK’s journey toward decarbonisation,” said AESC CEO Shoichi Matsumoto. “It reinforces our commitment to developing a robust battery supply chain and advancing electric mobility.”
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Construction on the Sunderland facility began in late 2022, adjacent to Nissan’s existing EV hub. Initial capacity is expected to be around 12 GWh, with a possible ramp-up to nearly 16 GWh. The site will serve as a cornerstone in the development of a battery manufacturing ecosystem in the North East. Nissan — which holds a 20 per cent stake in AESC following its 2018 sale to Envision Group — is expected to produce three EV models at the same location: the Qashqai, Juke, and the Leaf successor.
The announcement coincides with a new UK-US trade agreement that reduces vehicle export tariffs from 27.5% to 10% on up to 100,000 UK-manufactured cars annually, almost equivalent to Britain’s entire EV export volume last year.