Nissan has launched plans for a vast battery plant, known as a gigafactory, in northeastern England, where it will manufacture new electric vehicles as companies and governments accelerate away from fossil-fuel cars.

Chinese battery supplier Envision AESC will invest $620 million to build the battery plant, which will run on renewable energy and be able to power up to 100,000 Nissan electric vehicles per year.

The move will create 6,200 jobs and UK Prime Minister Boris Johnson hailed the post-Brexit investment totaling $1.38 billion at Nissan's largest European factory "a major vote of confidence in the UK."

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The facility will be built next to Nissan's current factory in Sunderland and should prove integral to the UK's climate change goals.

Lei Zhang, CEO of Envision Group, said the company was building on its long-term partnership with Nissan "to make high-performance, longer-range batteries for electric vehicles affordable and accessible for millions more motorists."

He said growth in demand could bring future investment of up to $2.48 million and 4,500 more jobs by 2030.

European expansion

The news comes just days after Nissan's French partner Renault unveiled plans for an Envision-owned battery factory in France, as global car makers race to meet booming demand for greener transport and governments target net-zero carbon emissions by 2050.

The Japanese auto giant is to spend up to $582 million on Britain's all-electric EV36Zero project, and Sunderland City Council will help to bring the total amount of investment up to $1.38 billion.

"This is a landmark day for Nissan, our partners, the UK, and the automotive industry as a whole," said Nissan's Chief Operating Officer Ashwani Gupta, standing next to a line of newly made Nissan vehicles awaiting their final inspections.

Nissan, which had previously warned that a no-deal Brexit would threaten its 35-year-old Sunderland factory, said the new investment represents 6,200 jobs at the Japanese group and its UK suppliers.

There will be 900 new Nissan jobs and 750 new Envision jobs.

Battery-powered car boom 

"This is a huge step forward in our ambition to put the UK at the front of the global electric vehicle race," said UK Business Secretary Kwasi Kwarteng.

"The cars made in this plant, using batteries made just down the road at the UK's first at-scale gigafactory, will have a huge role to play as we transition away from petrol and diesel cars."

The UK government, which hosts COP26, the United Nations' climate change summit in November, has committed to ban new fossil-fuel car sales from 2030 as part of efforts to reach net-zero carbon emissions by 2050.

Europe now has projects to build dozens of gigafactories that could potentially produce 16.7 million battery-electric vehicles by 2030, according to Transport & Environment, a non-governmental organization.

Volvo and Swedish start-up Northvolt announced last week they were joining forces to build a new battery factory in Europe.

"UK and European car makers are engaged in a race to develop capacity to produce battery-electric cars," Peter Wells, an expert on the auto sector, told AFP. 

"Those manufacturers that fail to develop BEV (battery electric vehicle) capabilities will simply lose market share," the Cardiff University economics professor added.