Jatco’s Sunderland factory is seeking alternative work after plans to supply Nissan with electric powertrains were scrapped, raising questions over its long-term role and job creation targets.
The Jatco plant, majority owned by Nissan, opened in January 2025 at the International Advanced Manufacturing Park next to the carmaker’s Sunderland factory, supported by a £50 million investment deal including £12m from the Government’s Automotive Transformation Fund.
The facility had been expected to produce up to 340,000 electric powertrains a year for future Nissan EV models, with around 80% of its output initially earmarked for the nearby plant.
Nissan drops plan
However, Nissan has confirmed it will no longer make its three-in-one electrified powertrain in the UK, removing the core volume underpinning the factory’s business case.
A spokesperson for Nissan told Chronicle Live: “Under the global RE:Nissan recovery plan, Nissan, together with partners, has conducted a comprehensive review of key initiatives, introducing further measures to ensure a strong recovery. As part of this the decision has been taken not to localise production of 3-in-1 electrified powertrain to the UK. There is no immediate impact to jobs as Jatco are continuing to study global production capacity.”
Jatco had previously signalled ambitions to secure additional supply agreements with other manufacturers including Volkswagen and BMW as part of its strategy to establish the site as a European production hub.
Jobs outlook
The plant had been expected to create 183 direct jobs, alongside a further 400 roles in the wider supply chain. However, recruitment has yet to scale, with just 20 employees currently based at the site.
North East mayor Kim McGuinness said: “Our successful automotive industry is a huge source of pride in the North East and remains an incredibly important part of our regional economy. I am seeking a meeting with partners on this as soon as possible as well as continuing to call for more Government funding to help support further growth and development of the EV sector.
A Government spokesperson told Chronicle Live: “Whilst this is a commercial decision, we will continue to support the company and their staff where possible. The UK automotive industry is vital to the North East. 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.”
Jatco is now understood to be exploring alternative production opportunities, including potentially making other types of electrified powertrain systems.
The development comes amid wider scrutiny of EV investment strategies, although Nissan recently played down concerns that new European regulations could threaten the long-term future of its Sunderland operations.
Earlier this month, the Society of Motor Manufacturers and Traders (SMMT) called on the EU to amend its proposed Industrial Accelerator Act to ensure the UK automotive sector remains a recognised ‘Made in Europe’ partner.
The UK trade body made the appeal during meetings with EU representatives in Brussels, warning that excluding UK-built vehicles, parts and batteries from the policy would damage both economies and weaken European automotive competitiveness
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