£1 billion for EV battery gigafactory

A new gigafactory in Sunderland has received a £1 billion boost in a move to spearhead the UK's vehicle electrification goals.

The new AESC gigafactory will manufacture batteries for electric vehicles (EVs), and will power up to 100,000 EVs each year, six times as much as the country's current capacity. 

The National Wealth Fund and UK Export Finance are to provide financial guarantees to provide £680 million in financing from banks such as Standard Chartered, HSBC, SMBC Group, Society Generale and BBVA to cover construction and operation of the new plant. The remaining £320 million has been secured through private financing as well as new equity provided by AESC.

Additionally, the government's Automotive Transformative Fund will also invest £150 million in grant funding.

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."

This follows a trade deal between the UK and the US that has cuts car export tariffs from 27.5% to 10% and will apply to a quota of 100,000 UK cars.