UK welcomes £1 billion investment in battery factory for electric vehicles

The UK's transition to electric mobility has received a massive boost as the government confirms £1 billion investment in a gigafactory. AESC will operate the facility in Sunderland.

The plant will employ about 1,000 workers and produce enough batteries to power 100,000 EVs annually. The output will increase the UK's battery manufacturing capacity by sixfold and contribute to making locally-made electric cars more competitive at home and globally.

The funding is backed by guarantees from the National Wealth Fund and UK Export Finance up to £680 million. Participating banks include Standard Chartered, HSBC, SMBC Group, Societe Generale, and BBVA. AESC will source the balance from private lenders.

AESC CEO Shoichi Matsumoto said: "This investment marks a key milestone in AESC's ongoing efforts to support the UK's path towards decarbonisation and the expansion of its EV market. Through close collaboration with strategic partners, we strive to accelerate this transition while creating high-quality local jobs and building a resilient, sustainable supply chain."

Chancellor of the exchequer, Rachel Reeves, commented: "We are going further and faster to boost our industries' resilience and encourage their growth as part of our Plan for Change, and this investment follows hot on the heels of yesterday's landmark economic deal with the US which will save thousands of jobs in the industry."

The investment is timely as more British drivers are switching to electric cars. EVs reached 20.4 percent of the auto market in April 2025.