Plans for Nissan to make an electric version of its popular Qashqai in Britain are on hold unless the Japanese carmaker secures extra government support.
Nissan has suspended work on an all-electric Qashqai that it said three years ago would be built at its plant in Sunderland, according to Reuters.
Resuming the plans is likely to depend on a package of support currently being negotiated between the Government and the company, as well as whether Labour waters down electric car targets.
The delay is a blow to Britain’s ambitions to establish itself as a serious player in the electric vehicle (EV) manufacturing sector.
Nissan announced in 2023 that it would manufacture both the electric Qashqai and electric Juke in Sunderland, helped by up to £1bn in taxpayer support and preserving 6,000 jobs.
Rishi Sunak, who was prime minister at the time, said the plan was a “vote of confidence in the UK’s automotive industry”.
Nissan already produces the all-electric Leaf at its Sunderland plant, which is the biggest carmaking facility in Britain and produces more than a third of the country’s output. It also said in April that its new Juke model would be made there.
However, the company quietly suspended development work on the electric Qashqai last year, according to Reuters. The family-sized Qashqai is Nissan’s most popular car in Britain and the UK’s fourth best-selling car so far this year.
Nissan has been embarking on a global cost-cutting drive to counter falling sales. Earlier this year, it closed one of its two production lines in Sunderland and has since given over the space to Chinese manufacturer Chery.
Established car manufacturers have been hit hard by the arrival of cheap Chinese electric cars.
In Britain, the zero-emission vehicle (ZEV) mandate, which requires that a third of new cars sold this year be electric, has forced some to discount EVs or limit sales of petrol cars. Nissan is among those struggling to hit the targets, analysts have said.
The company has been in discussions with the Government about more support for the Sunderland plant, which Reuters said could allow it to resume plans for the electric Qashqai.
This may also depend on easing the ZEV mandate, which is scheduled to increase next year to require 38pc of all new car sales to be electric.
The Government has promised to review the mandate by early next year, which could include allowing more hybrid cars to contribute to the targets. Nissan has called the existing targets “outdated”.
A Nissan spokesman said it would outline more plans for the Qashqai soon. It said the company already offered several all-electric models and this would be “boosted by an entry level A-segment EV later this year”.