- The new factory was supposed to hire 183 people at the UK facility.
- Nissan had been planning to build 340,000 EV drive units each year.
- UK government gave Nissan a $16 million grant for the factory.
Nissan has scrapped plans to build electric drive axles at a factory near its Sunderland home in the UK, even after committing roughly $65 million to the project it announced just last year. The about-face is the latest piece of collateral damage from a company trying to drag itself out of a deep financial hole.
The EV drive units, which package the motor, inverter, and reducer into a single assembly, were going to be built by Nissan’s JATCO subsidiary at the Sunderland site, which opened last year. The UK government had thrown in a £12 million ($16 million) grant to help get things moving, and the facility was on track to bring in 183 new hires, although only 20 have actually been brought aboard so far.
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The initial plan was for the factory to produce up to 340,000 EV drive units each year and it would have joined other facilities that JATCO operates in Mexico, China, and Thailand. According to Nissan, the reversal comes as part of the RE:Nissan revival plan, which aims to turn around the company’s dire economic situation. Nissan is now reviewing whether the plant can be adapted to build other types of powertrains instead.
Fighting Falling Sales
Nissan’s EV business in Europe is having a rough run too. Nikkei Asia reports that Ariya sales fell 44 percent in the 2025 fiscal year compared to the year before. Leaf sales cratered by 99 percent, though that figure comes with an asterisk: the old car has been retired and replaced by a more affordable new crossover. Nissan is banking on the new Leaf to become its top-selling EV in the region.
The company says there will be no immediate job losses among the 20 staff working at the site while it assesses whether the plant can be adapted to produce other powertrains. Despite the expensive change in plans, a government spokesperson says it will continue to support the brand.
“The UK automotive industry is vital to the North East,” they told the BBC. “That’s why, through our Modern Industrial Strategy, we’re delivering nearly £1bn of DRIVE35 capital and R&D funding to strengthen manufacturers and local supply chains in the region.”
