According to Reuters, citing the Nikkei, the decision was made amid slowing demand for EVs, high investment costs and a deteriorating European car market.
The volume of investments was estimated at 48.7 million pounds (about $65 million). The enterprise was to produce up to 340 thousand EV-drives per year and create about 180 new jobs. The launch of production was planned for 2026.
However, according to Reuters, the company decided to abandon the project after market conditions in the electric vehicle sector deteriorated. The factors include weaker-than-expected demand for EVs in Europe, high production costs and increasing competition from Chinese automakers.
Nissan will continue to produce electric vehicles at its Sunderland plant, which remains one of the largest automotive production centers in the UK.
The transition to electric vehicles has been more expensive than expected
Nissan’s decision reflects a broader review of the global auto industry’s investment plans. Many electric vehicle manufacturers have become more cautious in recent months about the pace of the market’s transition to EV models due to pressure on margins and slowing consumer demand.
For the UK, the cancellation means a further blow to the national supply chain strategy for the electric vehicle industry after Brexit. London had hoped to attract major investment in battery and component manufacturing to keep the British car industry competitive in the face of the industry’s global transformation.
The situation also shows that the global transition to electric vehicles may prove to be a longer and more capital-intensive process than expected a few years ago.
