The UK's largest electric vehicle (EV) battery gigafactory, operated by Chinese-owned AESC in Sunderland, has shelved its plans to expand production. This decision is attributed to stalled negotiations for a battery supply deal with Jaguar Land Rover (JLR).
AESC currently produces batteries for Nissan at its Sunderland plant. However, the company has also had to push back its ramp-up plans due to lower-than-expected demand from Nissan and the absence of a deal with JLR, according to sources familiar with the situation.
The delays are seen as another indication of a slowing transition from petrol and diesel vehicles to electric cars. JLR, which is Britain's largest automotive employer, was reportedly close to a supply deal with AESC last year to secure cells until its own Agratas factory in Somerset becomes operational in 2027.
The failure to secure JLR as a customer has impacted AESC, leading to the delay in installing a third manufacturing line at the Sunderland gigafactory, which was intended to supply JLR. Disputes over the cost and timing of battery supply, as well as JLR's reported unwillingness to make formal financial commitments, are cited as reasons for the stalled talks.
AESC's long-term plans for two additional lines to supply Nissan are still in place, but Nissan has also slowed its shift to electric vehicles. This uncertainty has also cast doubt on plans for a "microgrid" to provide cheaper energy to the AESC and Nissan factories.