The UK government has announced a £1 billion funding agreement to build a new electric vehicle (EV) battery gigafactory in Sunderland, northern England. The deal, reached with Japanese battery manufacturer AESC, is expected to significantly enhance the UK’s EV battery production capacity, supporting the nation’s transition to electric vehicles and contributing to sustainable transportation.
The funding package includes £680 million in government-backed financial guarantees through the National Wealth Fund and UK Export Finance. This will unlock additional financing from commercial banks such as HSBC and Standard Chartered. AESC will contribute the remaining £320 million through private financing and equity.
The new gigafactory is poised to create more than 1,000 jobs and will have the capacity to produce enough batteries for approximately 100,000 electric vehicles annually. This represents a substantial sixfold increase in the UK’s current EV battery manufacturing capabilities. The factory is part of the UK’s broader strategy to decarbonize transport and enhance its standing in the global electric vehicle market.
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Sunderland, already home to Nissan’s largest UK plant, will further cement its role in the country’s EV ecosystem with the addition of this new facility. The announcement follows a recent UK-US trade agreement that reduces tariffs on British car exports, providing further support to the UK’s automotive sector.
Government officials have hailed the investment as a significant boost to the British car industry. The project is expected to drive economic growth in the region while accelerating the transition to electric vehicles, aligning with the country’s ambitious sustainability goals.
