AESC, the Chinese-owned battery maker behind the UK’s largest EV battery gigafactory in Sunderland, has delayed plans to expand production after talks stalled over a potential supply agreement with Jaguar Land Rover. The company also faces softer-than-expected demand from Nissan, according to people familiar with the situation.
AESC currently supplies batteries to Nissan from the facility next to the automaker’s Sunderland plant. The site has two production lines running, but the company has not yet installed a third line that had been expected to help serve JLR. People with knowledge of the matter said discussions between AESC and JLR stalled because the carmaker was unwilling to make formal financial commitments, while another source pointed to disagreements over pricing and timing.
The delay adds to signs that the shift from petrol and diesel vehicles to electric cars is slowing. The UK government recently indicated it could further reduce electric vehicle sales targets, a move that could affect the wider EV supply chain. Across Europe, battery manufacturers have struggled as automakers have scaled back earlier electrification plans and demand has grown more slowly than expected.
JLR’s sister company, Agratas, is building its own gigafactory in Somerset, with production currently scheduled to begin in 2027. The project has reportedly faced construction challenges that could push the start date back further. JLR had been close to a deal with AESC last year as it worked to secure battery cells before the Agratas plant comes online, but it has since reached agreements with other suppliers.
AESC also plans two additional lines for Nissan, although the automaker has slowed its transition to electric vehicles as it restructures its operations. Concerns have also been raised about future demand, especially as Nissan prepares one of its Sunderland assembly lines for production linked to China’s Chery.
AESC has reduced its long-term output ambition from 38 gigawatt-hours a year to 15.8 GWh, enough for about 300,000 electric cars. The company said it remains confident in long-term battery demand, including for energy storage, and secured a £1 billion refinancing package last year, with support from the UK government.
Source: The Guardian
