AESC, a Chinese-owned battery manufacturer operating the UK’s biggest electric vehicle battery facility in Sunderland, has shelved expansion plans amid negotiations challenges and softer demand from its primary customer, Nissan. The company had been working toward a supply agreement with Jaguar Land Rover to secure a contract that would justify installing additional production lines, but those talks have stalled over disagreements regarding financial commitments and pricing terms.
The delay reflects broader headwinds facing the electric vehicle industry across Europe and beyond. Multiple battery manufacturers have experienced significant setbacks in recent years as automotive companies retreated from aggressive electrification targets. Several high-profile projects have either collapsed or undergone substantial scaling back, including Sweden’s Northvolt and the UK’s Britishvolt. The slowdown stems from slower-than-expected consumer adoption of electric vehicles, rising interest rates, and shifting government policies, particularly in the United States.
Jaguar Land Rover has pursued alternative battery suppliers in the interim while its sister company, Agratas, develops a new gigafactory in Somerset scheduled to begin operations in 2027, though construction challenges may delay that timeline. Meanwhile, Nissan itself has reduced its electrification pace while restructuring operations, including stopping production of its own vehicles on one assembly line in Sunderland to manufacture vehicles for Chinese manufacturer Chery. AESC’s French operations have performed more successfully, benefiting from robust demand for the Renault 5 electric vehicle, though expansion efforts in Spain have encountered delays.
AESC previously set an aspirational target of 38 gigawatt-hours of annual capacity but has since adjusted expectations to 15.8GWh. The company secured £1 billion in refinancing last year, including UK government support, though current production uncertainties have also impacted plans for a microgrid energy project designed to improve competitiveness by reducing electricity costs.
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