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Nissan is set to launch a £50 million factory dedicated to producing electric vehicle (EV) transmissions at Sunderland’s International Advanced Manufacturing Park, a site previously converted into a Nightingale hospital during the Covid-19 pandemic.
A Strategic Move to Boost EV Production
The 140,000-square-foot facility near Nissan's sprawling Sunderland car plant will manufacture transmissions for three EV models. Operated by Jatco, a Japanese transmission specialist, the plant is expected to create 183 jobs directly and support 400 additional roles across the supply chain. Production will begin next year after the site is fitted out in the coming weeks.
The project benefits from £12 million in government funding via the Automotive Transformation Fund, reflecting its importance in accelerating the UK's shift to EV manufacturing.
From Hospital to EV Hub
The factory will repurpose a building that was part of the Nightingale Hospital initiative, a £500 million scheme launched to handle Covid-19 surges. Despite its £24 million conversion cost and capacity for 460 beds, the Sunderland site remained largely unused and has been empty for the past three years.
This new facility is a key component of Nissan’s ambitious £3 billion project to transform its Sunderland plant into a leading EV production hub. The hub will focus on battery-powered versions of the Qashqai and Juke crossovers, as well as an updated Leaf.
The expansion comes as Nissan and other automakers strive to meet the UK government’s Zero-Emission Vehicle (ZEV) mandate. The mandate requires 28% of car sales to be electric by 2023. Non-compliance could result in hefty fines of £15,000 per non-electric vehicle sold.
While Nissan accelerates its EV investments, it faces mounting challenges, including stricter emissions limits for hybrid vehicles and competition from Chinese automakers producing cheaper EV models. Nissan has expressed concerns about the rapid pace of the transition, warning of potential job risks.
Baroness Poppy Gustafsson, minister for investment, said at the Nissan event on Thursday: “The Government understands the challenge the industry faces in achieving these goals and doing so in a way that doesn’t disrupt their business, doesn’t disrupt jobs and means that it can be done as smoothly as possible.
“On the one hand we want to encourage this movement towards electrified vehicles but on the other hand we don’t want to do that at a pace that is too disruptive to the private sector.”
Despite industry pushback, the UK government remains firm on its timeline to phase out petrol and diesel cars by 2030. Proposed limits may also lead to the phaseout of popular models, such as Nissan’s mild hybrid Qashqai.
The intense pressures of the EV transition have pushed Nissan to enter merger talks with longtime rival Honda. Makoto Uchida, Nissan’s CEO, remarked during the announcement in December that Honda represents “a partner who can share the sense of crisis about the future,” highlighting the urgency of collaboration as both automakers navigate the rapidly evolving automotive landscape.
As part of Nissan’s broader EV strategy, Jatco, its Japanese transmission subsidiary, will launch its first European operation at the new Sunderland facility. The plant will be able to produce 340,000 electric powertrains annually, supporting Nissan’s push to meet increasing EV production targets and remain competitive in a market dominated by aggressive regulatory deadlines and rising competition from lower-cost Chinese EV manufacturers.
Mr Johnson said: “Localising our supply chain boosts our competitiveness and efficiency. It’s another step forward in creating an EV manufacturing system in the North East of England.”
Kim McGuinness, the Mayor of North East England, said the site had always been earmarked for the automotive industry before Covid intervened. Jatco’s plans represented “a fantastic transformation and a vote of confidence in carmaking in Sunderland”.
The potential Nissan-Honda merger, coupled with the establishment of Jatco’s Sunderland plant, underscores the critical steps automakers are taking to address the demands of electrification. These moves position Nissan to secure its place in the global EV race while leveraging partnerships to overcome industry challenges.