Nissan NSANY plans to make an investment of $1.4 billion to update its plant in northeast England to manufacture electric versions of two of its best-selling cars. The investment is expected to boost the country’s ailing economy.
The automaker currently manufactures gasoline or gas-hybrid Qashqai and Juke crossovers at its Sunderland plant. The amount will include a third battery facility in Britain and infrastructure projects that will be financed by partners.
The project is expected to receive support from the British government.
Nissan has been making electric Leaf models in Sunderland for years, with batteries supplied by a plant at the site.
In 2021, Nissan, together with its Chinese partner Envision AESC, announced an investment of $1.4 billion to build a second, 9 gigawatt-hour (“GWh”) battery facility in Sunderland.
The deal is Rishi Sunak’s, the prime minister of the United Kingdom’s, first step toward reviving the interest of overseas companies, which cooled down following Brexit in 2016 and political turmoil.
Nissan did not disclose the value of the subsidies or guarantees provided by Britain.
The automaker plans to electrify its entire European passenger car lineup by 2030. Per Makoto Uchida, president and CEO of Nissan, with electric versions of its core European models on the way, the company is accelerating toward a new era.
In this year’s list of the United Kingdom’s most popular vehicles, Qashqai has secured the second spot, while Juke has secured the seventh spot.
The auto industry is preparing itself for 10% post-Brexit trade tariffs, effective January 2024. The European Union (“EU”) has threatened to raise the cost of electric vehicles (“EVs”) if manufacturers fail to source enough components from either the EU or Britain.
Nissan is the only carmaker in the U.K. with a dedicated battery plant nearby. It will join other automakers in making the transition to EV production in the United Kingdom.
Earlier, BMW announced an investment of £600 million into its Mini factory in Oxford, England. Tata Sons announced an investment of £4 billion in the U.K.’s EV battery factory to produce around 40 GWh of battery cells per year. Stellantis announced an investment of £100 million to make electric vans and cars in northwestern England.
Zacks Rank & Key Picks
NSANY currently carries Zacks Rank #2 (Buy).
Some other top-ranked players in the auto space are Volvo VLVLY, BYD Company Limited BYDDY and Toyota Motor Corporation TM, each sporting Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for VLVLY’s 2023 sales and earnings indicates year-over-year growth of 4.2% and 65.6%, respectively. The EPS estimate for 2024 has increased by 24 cents in the past 30 days.
The Zacks Consensus Estimate for BYDDY’s 2023 sales indicates year-over-year growth of 160.2%. The EPS estimate for 2023 has increased by 62 cents in the past 60 days. The EPS estimate for 2024 has increased by a penny in the past 30 days.
The Zacks Consensus Estimate for TM’s 2023 sales and earnings indicates year-over-year growth of 11% and 45.4%, respectively. The EPS estimates for 2023 and 2024 have increased by $2.37 and 13 cents, respectively, in the past 30 days.
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