Nissan's Chinese Battery Partner Plans U.K. Project 'Very Soon'

Nissan Motor Co.'s Chinese battery partner plans a U.K. project "very soon," according to its chief executive officer, amid expectations that the Japanese carmaker will forge ahead with expansion plans in Britain.

Nissan may announce an agreement with Envision Group to upgrade a battery factory in Sunderland, England as soon as this week, according to a person familiar with the matter. The project is part of a revamp of the automaker's U.K. electric-car strategy, said the person, who asked not to be identified as the plans are still confidential.

A U.K. project would put Envision on an expansion course in Europe. The company plans to spend as much as 2 billion euros ($2.4 billion) on a battery plant in northern France to power an affordable range of Renault SA electric vehicles. French President Emmanuel Macron on Monday unveiled the project at Renault's assembly plant in Douai, where the Envision battery facility will be located. It's the first in Europe for the Chinese company, which also makes wind turbines.

Envision's project in the U.K. is meant to "increase" the country's battery output, Chief Executive Officer Lei Zhang told Bloomberg News at the sidelines of the Renault event. The project goes beyond supplying just Nissan in Sunderland, he added, declining to be more specific.

Nissan and Renault are the latest among automakers to map out battery plans in Europe in recent months, a sign that competition to ensure adequate supply for their electric vehicles is heating up. U.K. carmakers are especially dependent on an adequate local production network to avoid tariffs when trading with the European Union.

Porsche and Volvo Car Group last week announced plans to produce power packs, while Peugeot maker Stellantis NV will update investors on its EV strategy July 8. Volkswagen AG in March unveiled a multi-billion-euro plan for six European battery factories.

Nissan already makes the Leaf electric hatchback in Sunderland and procures batteries for the model from Envision AESC, the battery unit of the Shanghai-based parent.

French Expansion

In France, the supplier is planning for production of 24 gigawatt-hours worth of batteries by 2030 to outfit the future Renault 5 model. It pledged to create 2,500 jobs by the end of the decade.

Envision's plans for the Douai site could also go beyond Renault. Its building permit application is for capacity of 43 gigawatt-hours by the end of the decade, a goal that Lei said could be achieved if deals are reached with other carmakers.

Bolstering local battery production will be crucial for U.K. carmakers in the wake of Brexit. The trade agreement reached in the waning days of 2020 forces manufacturers to source more of the content going into their vehicles and battery packs locally in order to qualify for tariff-free trade with the EU.

Nissan sold its controlling stake in its battery operations to Envision in 2018, though it retained a 20% holding of the division.