Nissan has confirmed it will invest £200 million to build lithium ion battery plants in the UK and Portugal - but has stopped short of committing to building electric cars in the UK.
The UK site will be in Sunderland, and it will be the Renault-Nissan alliance's European headquarters for battery production. The venture will be called the Nissan European Mother Site for Battery Production and it is estimated 350 jobs will be created by it being built.
The two plants will supply lithium-ion batteries for electric vehicles to be produced by the Renault-Nissan Alliance. The projected annual capacity for each plant is 60,000 units.
Renault-Nissan has committed to offering electric cars in the US and Japan in 2010 and across the world by 2012.
Both plants will be subsidised by their respective governments, with the Sunderland plant being used as the centerpiece of a Low Carbon Economic Area in the North East of England by the government.
It is the first committment from the government to spend some of the £2.3 billion it set aside to help the car industry earlier this year. The government has said it will provide loans and loan support guarantees to help fund the site, with Nissan pledging to invest £200 million over five years.
Prime minister Gordon Brown said: "Nissan’s investment in a new battery plant and its hope to start producing electric vehicles here in Sunderland is great news for the local economy, creating up to 350 direct jobs and creating and safeguarding hundreds more in the associated supply chain.
"This investment is also hugely significant as we embark on Building Britain’s Future, our plan for recovery and beyond powered by low carbon, high technology industries, products and services.