Nissan retreats from major UK investment as European sales for EVs falter

Nissan Motor has abandoned plans to manufacture electric vehicle drive units in the UK, scaling back investment amid weak demand for its EV models in Europe.

The Japanese automaker said its subsidiary Jatco will no longer proceed with plans to build a factory in Sunderland to produce e-axles, which, as explained in a Nikkei Asia article, is a key EV component that combines motors, inverters, and gears into a single unit.

The facility, originally announced in 2025 and scheduled for completion this year, was expected to produce up to 340,000 units annually. Initial investment in the project was estimated at around 9 billion yen ($56 million), but the plan has now been shelved after roughly a year.

Nissan currently manufactures its compact Nissan Leaf EV at its Sunderland plant and plans to begin production of an all-electric version of the Nissan Juke crossover for the European market from 2027.

While the company did not specify which vehicles the Sunderland-produced e-axles would have supported, Nissan had previously indicated that Jatco’s systems were intended for EVs manufactured in Europe. For now, the company is expected to continue exporting the drive units from Japan to the UK.

Nissan’s EV sales across Europe have struggled in recent years. In fiscal 2025, sales of the Leaf — currently undergoing a model transition — collapsed 99% year-on-year to just 87 units. Sales of the Nissan Ariya also fell sharply, dropping 44% to 11,507 units.

Nissan’s share of the European market declined to 2.2% in 2025, down from 3.9% a decade earlier, as the article notes citing data from the European Automobile Manufacturers' Association.

The move forms part of Nissan’s broader restructuring under its “Re:Nissan” turnaround strategy unveiled in May 2025. The plan includes a global review of both vehicle and powertrain production, covering factories that manufacture engines and electric motors in Japan and overseas.

The automaker has already identified seven vehicle plants for closure, although details surrounding its powertrain restructuring have yet to be disclosed. Nissan says it aims to finalize specific measures by around spring 2027.

The decision also reflects a broader slowdown in global EV demand. According to consultancy Benchmark Mineral Intelligence, worldwide EV registrations fell 11% in February, driven largely by China’s steepest sales decline since the start of the COVID-19 pandemic in 2020.

Governments around the world have increasingly scaled back policies designed to encourage EV adoption. In China, authorities ended funding for vehicle trade-in subsidies, while a tax exemption for EV purchases expired at the end of last year.

By Nazrin Sadigova