Sunderland battery gigafactory pauses expansion as Jaguar Land Rover supply talks falter

AESC, the Chinese-owned battery maker operating the UK’s largest gigafactory beside Nissan’s Sunderland plant, has postponed its expansion after supply-deal negotiations with Jaguar Land Rover stalled. Sources say JLR hesitated to make firm financial commitments, and disputes over price and timing further hampered the talks, leaving the third production line on hold. The setback comes as Nissan’s demand for batteries has softened and the UK Labour government contemplates cutting electric-car sales targets, underscoring a wider slowdown in the continent’s shift to EVs.

Jaguar Land Rover has already secured agreements with other battery suppliers while its affiliate Agratas continues building a Somerset gigafactory, though that project faces its own construction delays and will not start production until 2027. AESC’s plans for additional lines to serve Nissan remain long-term, but the automaker’s own transition to electric models is lagging amid plant closures and workforce cuts. The company recently obtained a £1 billion refinancing, part of which was government-backed, but the uncertain demand also jeopardises a proposed on-site microgrid intended to lower energy costs. AESC, Chery and JLR declined to comment.