Nissan Warns Sunderland Plant Closure if UK Excluded from EU ‘Made in Europe’ Rules

Nissan has warned that it could be forced to close its Sunderland plant if the United Kingdom is not fully included in new “Made in Europe” manufacturing rules proposed by the European Union. The potential closure of Britain’s largest car factory, which employs 6,000 people, stems from concerns over access to EU incentives for electric vehicle (EV) development under the proposed Industrial Accelerator Act (IAA).

EU’s Industrial Accelerator Act and the ‘Made in Europe’ Standard

The EU’s IAA, unveiled by Competition Commissioner Stéphane Séjourné, aims to protect the bloc from competition from China by providing public subsidies for EV development. A key component of the plan is that these subsidies would only be available to EVs manufactured in European plants. The initial draft of the IAA raised concerns that vehicles produced in the UK, even with significant EU content, might be excluded from these incentives.

Nissan’s Concerns and Potential Impact

Nissan privately warned the UK government that excluding the UK from the “Made in Europe” rules could lead to the closure of the Sunderland plant. According to one industry executive, the company could face an “existential threat” if it loses access to EU incentives. Financial Times reports that Nissan communicated these concerns directly to the UK government.

The Sunderland site has the capacity to produce 600,000 cars annually, though current demand means it is operating below that level. The plant is a significant employer in the region, and its closure would have a substantial economic impact.

Industry Response and Brexit Implications

The Society of Motor Manufacturers and Traders (SMMT), the UK auto industry’s trade representative group, has expressed “grave concern” over the proposals. Mike Hawes, the SMMT’s chief executive, stated that the IAA, as currently drafted, would “effectively put UK manufacturers at a systemic competitive disadvantage in the EU market.” He also raised concerns that the proposals might violate the EU-UK Trade and Cooperation Agreement – the Brexit deal. The Guardian

Hawes has called for the UK and EU to collaborate to resolve the situation and grant the UK auto sector “full trusted partner status.”

Government Response and EU Clarification

The UK government has stated it is a “close and trusted European partner” and is committed to economic cooperation with the EU. Business Secretary Peter Kyle visited Brussels to advocate for the UK’s inclusion in the ‘Made in Europe’ initiative, but did not meet with Commissioner Séjourné. The Guardian

Commissioner Séjourné clarified that third-party countries with trade agreements with the EU would not be excluded, unless they implement policies favoring domestic industries, such as “buy national” requirements. The Guardian

Shift Towards ‘Made with Europe’

According to Professor Simone Tagliapietra, a senior fellow at the Bruegel thinktank in Brussels, the IAA has evolved to allow for “Made with Europe” products, opening the initiative to third countries. This adjustment aligns EU industrial and trade policies. The Guardian

A European Commission spokesperson confirmed that the EU-UK trade deal means products originating in the UK would be considered equivalent to union origin for the purposes of the IAA, unless the UK excludes EU-originating products from its own schemes.

Further Reporting

Additional reporting on this issue can be found at: Autocar and The Sun.