Nissan has scrapped plans to produce electric drive axles at a factory near its Sunderland plant in the UK, even after receiving a $16 million government grant and investing roughly $65 million in the project.
The facility, operated by Nissan's subsidiary JATCO, opened last year with the goal of building up to 340,000 EV drive units annually.
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However, the company has now abandoned that plan as part of its RE:Nissan revival strategy to address its financial difficulties.
The UK government had provided a £12 million ($16 million) grant to support the project, which was expected to create 183 jobs.
So far, only 20 employees have been hired.
What Went Wrong
Nissan's EV sales in Europe have been declining.
According to Nikkei Asia, sales of the Ariya dropped 44 percent in the 2025 fiscal year compared to the previous year.
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The Leaf saw a 99 percent sales plunge, though the old model has been retired and replaced by a more affordable crossover.
The company is now reviewing whether the plant can be adapted to produce other types of powertrains.
A Nissan spokesperson stated there will be no immediate job losses among the 20 staff currently working at the site while the assessment is underway.
A UK government spokesperson reaffirmed support for Nissan, telling the BBC: “The UK automotive industry is vital to the North East.
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That's why, through our Modern Industrial Strategy, we're delivering nearly £1bn of DRIVE35 capital and R&D funding to strengthen manufacturers and local supply chains in the region.”
