National Wealth Fund Powers £1bn Investment into Sunderland’s EV Battery Plant

In a game-changing move, the National Wealth Fund (NWF) has teamed up with UK Export Finance (UKEF) to back a £1bn funding initiative to power a new electric vehicle (EV) battery gigafactory in Sunderland. This partnership marks a significant milestone in the UK’s push toward a cleaner, more sustainable future.

The NWF, launched just last year, was designed as a publicly backed investment vehicle, dedicated to channelling billions into critical projects that bolster food and energy security, revitalise industrial infrastructure, and ignite private sector growth. With the new collaboration with UKEF, the funds will help bring to life an ambitious project that could reshape the UK’s EV landscape.

The financial guarantees offered under this partnership will unlock a significant £680m in commercial bank financing from major players, including HSBC, Standard Chartered, SMBC, Societe Generale, and BBVA. The NWF and UKEF have each pledged an 80% financial guarantee, covering £272m of a £340m loan, ensuring robust support for the project.

This new financing structure replaces a temporary £200m bridging loan issued in January, part of the transition as the UK Infrastructure Bank shifted its operations into the NWF.

At the heart of this deal is the expansion of AESC—the Japanese-headquartered battery manufacturer, which will build its second gigafactory in Sunderland. This cutting-edge facility is expected to ramp up production to meet the surging demand for EVs, supplying batteries for up to 100,000 electric vehicles per year. The project will generate over 1,000 direct jobs, reinforcing the UK’s green transition.

Once fully operational, the plant will deliver 15.8 gigawatt-hours (GWh) of battery output, equivalent to nearly six times the UK’s current production capacity. This new factory will complement AESC’s existing plant in Sunderland, which has been producing EV batteries since 2012.

But the factory’s significance doesn’t end with job creation and increased capacity—it is a critical piece of the puzzle as the UK accelerates its EV revolution. With the country’s commitment to phasing out petrol and diesel car sales by 2030 under the Zero Emission Vehicle (ZEV) Mandate, and the extended deadline for hybrids until 2035, the industry is bracing for explosive growth.

Chancellor Rachel Reeves said: “We are going further and faster to boost our industries’ resilience and encourage their growth as part of our Plan for Change, and this investment follows hot on the heels of yesterday’s landmark economic deal with the US, which will save thousands of jobs in the industry.

“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 Northeast, putting more money in people’s pockets.”

Nissan, which already collaborates with AESC, has also committed over £1bn to its UK operations, including EV production at Sunderland. This further solidifies the area as a key hub for the UK’s green mobility future.

Experts argue that the UK must significantly scale its battery manufacturing capabilities to meet ambitious climate targets. Projections show that, within the next decade, the UK will require 50 million square feet of gigafactory space to keep up with the demand for batteries.

This partnership is not just a win for the companies involved—it's a strategic leap forward for the UK's broader sustainability and energy security agenda.