Key facts
- AESC's Sunderland gigafactory has paused expansion plans.
- Stalled negotiations with Jaguar Land Rover (JLR) are the primary reason.
- Lower demand from Nissan is also a factor in the production ramp-up delay.
- The UK's EV transition is showing signs of slowing, impacting battery manufacturers.
- JLR's sister company, Agratas, is building its own gigafactory, not due to start until 2027.
- AESC has reduced its annual capacity target from 38GWh to 15.8GWh.
The UK's largest electric vehicle battery gigafactory, operated by Chinese-owned AESC in Sunderland, has shelved plans for production expansion due to stalled negotiations with Jaguar Land Rover (JLR) and lower-than-anticipated demand from Nissan. This development signals a broader slowdown in the transition to electric vehicles, with several European battery projects facing difficulties, bankruptcies, or scaled-back ambitions.
AESC, which currently supplies Nissan at its adjacent plant, had intended to install a third manufacturing line to serve JLR. However, talks have reportedly stalled over JLR's unwillingness to commit financially or due to disputes regarding cost and timing. JLR is also developing its own gigafactory through its sister company Agratas, which is not scheduled to begin production until 2027 and has faced its own construction challenges.
Industry-wide, carmakers have tempered previous aggressive electrification targets as consumer demand has not met expectations. This has led to significant challenges for battery manufacturers, with notable collapses like Sweden's Northvolt and the UK's Britishvolt. Even Nissan's own shift to electric vehicles is slowing, with plans to retool a Sunderland assembly line for China's Chery.
AESC has adjusted its annual capacity target for the Sunderland plant from an aspirational 38GWh to a more realistic 15.8GWh. Despite these setbacks, AESC reportedly remains confident in long-term battery demand, including for energy storage solutions. The company secured £1 billion in refinancing last year, with support from the UK government, to fund its Sunderland operations.