“No more oddballs”: How Nissan will make Sunderland profitable in EV era

Pack prices have since dropped by around two-thirds, but given the low volumes of both batteries and cars, the second-generation Leaf is unlikely to be a significant profit generator for the company.

The third-generation Leaf will add the volume needed, predicted by Nissan to be around 100,000 units a year, as well as increasing the density and therefore range in the fifth-generation battery made on site by battery partner Envision AESC in a new facility under construction.

The aim is to build the Leaf as well as the Juke and Qashqai EVs to sell at a price on a par with equivalent combustion-engine models. Uchida acknowledges the difficulty. “How we achieve parity with ICE is a challenging discussion,” he said at the Sunderland announcement.

The scale is going in at a battery level but Nissan warns that it needs to extend to other suppliers as well. Britain’s remaining car makers have long complained that our comparatively low output compared with other European car-making countries means we’re not attractive enough to suppliers when they look to build new regional production hubs. 

One problem has been the lack of time to prepare. “The speed of electrification came earlier than we thought,” said Uchida.

There are other levers to pull. Uchida pointed to the fact that Nissan has traditionally had a lot of diversity and complexity in its model line-up, and hinted at simpler specs in the future. He also warned that more driver actions would shift to the touchscreen. “It is moving much faster from that perspective,” he said.

Helping the reduction in complexity is the fact that all three new electric models will be built on the same CMF-EV platform that currently underpins the Japanese-built Nissan Ariya EV, as well as the Renault Mégane E-Tech.

In fact, Sunderland will actively discourage any model that doesn’t share a high degree of common parts. “It's exactly why we weren’t interested in producing the next Micra here,” said Alan Johnson, head of manufacturing and supply chain management for Nissan in Europe. “Because if we start getting oddballs it makes the whole thing more complicated.” The new electric Micra will be built in France alongside the related Renault 5 to better make the economies of scale work.

Nissan Sunderland has had its fair share of ‘oddballs’ in the past, most recently the ill-fated Infiniti Q30 and QX30 premium compact pair, which were shoehorned into Sunderland from 2016 despite being based on a Mercedes platform. The cars were axed in 2019 following poor sales.

Nissan Sunderland is a long way from its heyday in 2012-2017 when it was producing over half a million cars a year. Last year the factory built 238,329 cars, according to figures from industry body the SMMT. Production is increasing again but Johnson is wary of going back to the half-million days and is instead aiming for the “sweet spot” of 400,000-450,000 a year. 

That’s maximum capacity at two shifts a day, which is a lot easier to manage than the three shifts of old. The employee levels reflect that at around 6000 now compared with 7000 in the heyday. “The cost of running three shifts are significant higher,” said Johnson. More volume is nice but he wants to avoid a situation in which it’s only viable for a certain period. “You don’t want to mess people about,” he said.

The problem is that planning volumes is so much more difficult. “The real big question with our new product is how successful are they going to be? I've learned over the years, it's extremely difficult to predict,” said Johnson. “Sometimes you’re too optimistic. Sometimes too pessimistic. Very rarely do you get it right.”

It's even harder as the world stumbles from one geopolitical shock to the next. “The trick is to be sufficiently cautious that from a business planning point of view you know you’re protected and that you have some margins in there,” said Johnson.

With all three EVs sharing parts to a greater degree than, say, the Qashqai e-Power and the Juke Hybrid, then the unexpected success of one model can offset any potential disappointment generated by another. 

Johnson is reluctant to make both production lines at Sunderland flexible enough to make all three cars, however. “That flexibility comes with a price tag,” he said. “I’d love to have more flexibility [but I’m] not sure we can justify it.”