How AESC's £1bn Gigafactory Tech is Transforming Transport
The UK Government has allocated £1bn (US$1.3bn) for the development of a cutting-edge AESC gigafactory.
Set to innovate EV battery production, this facility in Sunderland will manufacture state-of-the-art batteries designed to advance the EV market.
The National Wealth Fund and UK Export Finance will provide financial guarantees, unlocking £680m (US$898m) in funding.
This money comes from banking resources from institutions like HSBC, Standard Chartered and SMBC Group.
On top of this, the government's Automotive Transformation Fund contributes an additional £150m (US$198m) in grant funding.Shoichi Matsumoto, CEO of AESC, said: “This investment marks a key milestone in AESC’s ongoing efforts to support the UK’s path towards decarbonisation and the expansion of its EV market.
“Through close collaboration with strategic partners, we strive to accelerate this transition while creating high-quality local jobs and building a resilient, sustainable supply chain.
“We are honoured to contribute to the development of low-carbon economy with our advanced battery technologies.”
“Through close collaboration with strategic partners, we strive to accelerate this transition while creating high-quality local jobs and building a resilient, sustainable supply chain.
“We are honoured to contribute to the development of low-carbon economy with our advanced battery technologies.”
Chancellor of the Exchequer, Rachel Reeves, said: “This investment in Sunderland will not only further innovation and accelerate our move to more sustainable transport, but it will also deliver much-needed high quality, well-paid jobs to the North East, putting more money in people’s pockets.”
Meet AESC
AESC is a leading Japanese battery manufacturer, established in 2007 as a joint venture between Nissan and TOKIN Corporation.
It is known for its technological advancements.
Chinese clean energy firm Envision Energy acquired a portion of Nissan’s stake in 2019.
This partnership has equipped AESC with the ability to influence the EV battery market significantly.
The Sunderland plant, operational since 2012, was Europe’s pioneering battery facility and remains the UK's only such factory.
Its previous production capacity of 1.8GWh now pales in comparison to the future prospects of the forthcoming gigafactory, which promises an annual capacity of 15. GWh — powered entirely by carbon-neutral resources.
About AESC’s Sunderland gigafactory
AESC's second Sunderland plant, the gigafactory, recieved funding in 2021.
The new gigafactory will employ more than 1,000 people.
Construction began in December 2022 with a traditional Japanese “first pillar” ceremony, during which a bolt on the initial pillar was tightened.
The building’s footprint will cover an area equal to 23 football fields and will require 14,000 kilometres of main cabling.
UK Business and Trade Secretary, Jonathan Reynolds, said: “We’re backing our world-class car industry, and this investment is yet another vote of confidence in the North East’s thriving auto manufacturing hub which will secure a thousand well-paid jobs and boost prosperity across the region.”
John Flint, National Wealth Fund CEO, said: “AESC’s gigafactory will not only help to retool our car industry for net zero it will also support jobs, growth and prosperity in the Northeast.”
How the gigafactory will be funded
The National Wealth Fund and UK Export Finance will offer financial guarantees to support £680m (US$898m) in funding from several banks.
This funding will be used for both the construction and operation of the gigafactory.
In addition, an extra £320m (US$422m) has been raised through private financing, along with new equity investment from AESC.
Ian Stuart, CEO at HSBC UK, said: “We’re extremely proud to have played a leading role in this complex and significant deal, including as underwriter, structuring bank and joint ECA co-ordinator.“Once operational, the gigafactory will unlock a huge increase in the UK’s EV battery production, supporting the electrification of vehicles and the wider green transition.”
Natalie Blyth, Global Head of Sustainable Finance and Transition at HSBC, said on LinkedIn: “Fantastic to see HSBC play a lead role in the financing of AESC‘s second gigafactory in Sunderland, a landmark transaction supporting the UK’s electrification of vehicles.”
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