Expansion Plans Halted at Sunderland Gigafactory

AESC’s Sunderland battery plant – the United Kingdom’s largest gigafactory – has postponed the installation of a third manufacturing line that was intended to supply Jaguar Land Rover (JLR). Sources close to the negotiations say talks stalled because JLR has not made formal financial commitments and disputes remain over cost and timing. The same sources note that lower-than-expected demand from Nissan, AESC’s other major customer, has also forced the company to push back its ramp-up schedule.

The Guardian

The slowdown reflects a broader contraction in Europe’s electric-vehicle (EV) supply chain. Carmakers have retreated from ambitious electrification targets, and higher interest rates have strained battery makers. Recent high-profile failures include Sweden’s Northvolt and the UK’s Britishvolt, while other projects such as Automotive Cells Company’s planned factories have been cancelled. In the United Kingdom, JLR’s sister company Agratas is building a separate gigafactory in Somerset, but that plant is not expected to begin production until 2027 and has already faced construction difficulties.

The Guardian

AESC, originally founded within Nissan to power the Leaf, once aimed for 38 GWh of annual capacity in 2021. The company now targets roughly 15.8 GWh per year – enough for about 300,000 EVs – and operates two lines at Sunderland while postponing a third. Nissan has reduced output at its Sunderland car assembly plant, shifting one line to produce vehicles for China’s Chery, which has not yet finalized a battery supply agreement with AESC.

The Guardian

The Labour government, led by Andy Burnham, signaled that it may lower the UK’s EV sales targets, a move that could further pressure the domestic battery supply chain. AESC secured a £1 billion refinancing package last year, part of which came from the UK government, to fund the Sunderland site. The company remains confident about long-term battery demand and is exploring energy-storage opportunities, though the delayed “microgrid” project – intended to lower electricity costs – now faces uncertainty. AESC, Chery and JLR declined to comment on the stalled talks.

The Guardian