The British car industry has received a boost with the announcement of a £1bn ($1.3bn) investment in the gigafactory in Sunderland.
The facility will manufacture batteries for electric vehicles, supporting the production of up to 100,000 electric vehicles (EVs) annually.
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This development is set to create 1,000 jobs, enhancing the UK’s electric vehicle capacity six-fold.
In a landmark transaction, the National Wealth Fund and UK Export Finance have provided financial guarantees, unlocking £680m in financing from banks including Standard Chartered, HSBC, SMBC Group, Societe Generale, and BBVA.
This funding will cover the construction and operation of the new plant.
An additional £320m secured through private financing and new equity from AESC.
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By GlobalDataThe UK Government’s Automotive Transformation Fund is also contributing £150m in grant funding to support this initiative.
This investment aligns with the Government’s Plan for Change, aiming to make the UK more competitive globally and advance its position as a clean energy superpower through innovation in the automotive sector.
UK Chancellor of the Exchequer Rachel Reeves said: “We are going further and faster to boost our industries’ resilience and encourage their growth as part of our Plan for Change, and this investment follows hot on the heels of yesterday’s landmark economic deal with the US which will save thousands of jobs in the industry.
“This investment in Sunderland will not only further innovation and accelerate our move to more sustainable transport, but it will also deliver much-needed high quality, well-paid jobs to the North East, putting more money in people’s pockets.”
The recent UK-US trade deal, which reduces car export tariffs from 27.5% to 10% for a quota of 100,000 UK cars, further supports this growth.
This reduction is expected to save car companies several millions of pounds, securing high-skilled jobs in industrial areas like Sunderland.
AESC Japanese headquarter CEO Shoichi Matsumoto added:“This investment marks a key milestone in AESC’s ongoing efforts to support the UK’s path towards decarbonisation and the expansion of its EV market.
“Through close collaboration with strategic partners, we strive to accelerate this transition while creating high-quality local jobs and building resilient, sustainable supply chain.”
