Nissan to make electric cars in Britain

Lord Mandelson, the business secretary, will reveal plans to create a 'low-carbon economic area' in the north-east including a research and development centre for motor industry suppliers
Terry Macalister
guardian.co.uk, Sunday 19 July 2009 16.16 BST

The government is hoping to boost its chances of turning Britain into the "green car capital of Europe" by announcing tomorrow that the North East of England – home to the Nissan automotive company – has been chosen as the UK's second Low Carbon Economic Area.
Lord Mandelson, the business secretary, will outline the decision at the Nissan UK headquarters in Washington, County Durham, and say he wants the area to specialise in zero-carbon electric vehicles.
Ministers have been desperately trying to convince the Japanese company that it should base a new European green car manufacturing operation in Washington rather than at a rival facility in Spain. Nissan is expected to announce today new investment in its UK facilities, but refused to comment on speculation that it would produce electric cars in Britain.
Mandelson will try to further his case tomorrow morning by also unveiling plans for a special research and development centre for zero carbon vehicles which will coordinate work from five universities in the area. In addition, a technology park will be created to develop a supply chain for green vehicles.
Last week the government announced a Low Carbon Industrial Strategy and designated the South West of England as – a centre of marine and tidal energy schemes – that would become Britain's first Low Carbon Economic Area.
The government said it expected to create 1.2m green jobs by 2020. Its green cars strategy was given a boost on Friday when Toyota, the world's biggest car maker (by sales), said it was going to produce hybrid models in Europe for the first time from its Burnaston plant in Derbyshire.
Mandelson's Department for Business, Innovation and Skills has been trying to woo Nissan to make a similar move by dangling expectations of a £380m loan from the European Investment Bank.
A decision by Nissan to go green in Washington would secure the positions of 4,500 workers and a network of up to 20,000 suppliers who have been under pressure because of the credit crunch and a global downturn in car sales.
Mandelson visited the factory in April when he praised broad-based plans by the Japanese to construct a range of electric cars around its Nissan Nuvu prototype without saying where production would take place.
Mandelson told the local Echo newspaper recently: "Ever since I went to Nissan in Sunderland earlier this year I have been working very closely, very hard to make sure that they decide in Britain's favour to place their investment in our country and in the North East."
The Low Carbon Transport strategy, released by the government last week as part of the Energy White Paper, also underlined the commitment to being at the forefront of electric car schemes. "We are committed to making the UK a world leader in research, development demonstration and commercialisation of ultra-low carbon vehicle technology," it said.
Nissan has said it wants to produce a pure electric car by next year for fleet customers in Japan and the US. The vehicle would be powered by lithium batteries developed under a joint venture with NEC Corporation.
The company believes it can spearhead the mass marketing of zero-emission electric cars by 2012 and the UK government will help sales by offering a £5,000 grant to consumers to buy green cars.
Ministers are already operating a "cash for bangers" scrappage scheme whereby consumers are eligible for grants if they trade in old cars and buy new ones, to kickstart an ailing market which has led to Nissan and other carmakers laying off staff or putting them on short-time working.
Last week Jaguar added to the gloom by announcing plans to stop production of its X-type saloon car with the loss of 300 jobs at the Halewood plant on Merseyside. Jaguar's owner, Tata Motors, has said that it would scrap plans to build electric cars in Britain if it does not receive a £10m loan from the government's car package soon. Lord Mandelson yesterday warned the carmaker to accept a revised proposal to guarantee short-term funding or risk losing it.
The North East of England has been keen to position itself as a centre for green industry with a giant prototype wind turbine being created at Blyth and a cluster of companies in the area offering biofuels. There is also talk of installing charging points for electric vehicles at shopping centres and filling stations across the region.
The 1.2 million employees by the end of the next decade working in the low-carbon economy would not only build cars, but put up wind farms and trade carbon emission certificates from offices in the City of London. The government is banking on renewable power technologies – particularly wind – to provide 30% of all the country's electricity by the end of the next decade.
Ministers also count nuclear as a low-carbon technology and expect to see a raft of new atomic plants 'constructed in the UK.