On Friday, the Japanese automotive behemoth, Nissan, declared its intention to invest up to £2 billion in the manufacturing of electric cars in the UK. The government highlighted this move as a testament to the sector's confidence.

Nissan outlined its plan to manufacture electric versions of its two top-selling models, Juke and Qashqai, at its Sunderland facility in northeast England. Sunderland is Nissan's largest factory in Europe, aligning with the UK's net-zero objectives to transition away from environmentally harmful fossil-fuel vehicles.

The automaker is set to invest £1.12 billion ($1.4 billion) in its UK operations and the broader supply chain, specifically earmarked for research and development and the manufacturing of the two upcoming models, as stated in their official announcement.

This move is expected to trigger additional investments in infrastructure initiatives and the supply chain, which encompasses the establishment of another electric car battery factory. The cumulative investment could potentially reach up to £2 billion ($2.5 billion).

Nissan's substantial investment is poised to bolster its existing UK workforce of 7,000 employees, contributing to the sustenance of approximately 30,000 jobs within the broader national supply chain.

"Exciting electric vehicles are at the core of our strategy to achieve carbon neutrality," stated Nissan President and CEO Makoto Uchida.

"With electric iterations of our fundamental European models on the horizon, we are propelling ourselves into a new era for Nissan, the industry, and, most importantly, our customers."

In September, Uchida asserted that the group's electrification plans were irreversible, targeting 98 percent of European sales to be electric vehicles by 2027.

This development aligns with the United Kingdom's ambition to play a pivotal role in electric car production, responding to the global shift away from high-polluting automobiles. On Friday, the UK government confirmed a £15 million funding allocation for a collaborative R&D project on zero-emission vehicles, spearheaded by Nissan.

"Nissan's investment represents a significant expression of confidence in the UK's automotive industry, a sector that already contributes a substantial £71 billion annually to our economy," remarked British Prime Minister Rishi Sunak, scheduled to make a formal announcement at the site later on Friday.

"This initiative will undoubtedly solidify Sunderland's position as the UK's Silicon Valley for electric vehicle innovation and manufacturing. Establishing the UK as the premier destination for business is a cornerstone of our economic strategy," stated Finance Minister Jeremy Hunt during his budget update on Wednesday, committing to invest £4.5 billion in key sectors, including the automotive industry.

Earlier this year, Sunak eased policies geared toward achieving net-zero carbon emissions by 2050, postponing the prohibition on the sale of petrol and diesel cars by five years to 2035.

Nevertheless, this implies that the country's predominantly foreign-owned car manufacturing sector must transition to the production of fully-electric vehicles. Despite previous warnings from Nissan that a no-deal Brexit could jeopardize the Sunderland site, the commitment to its future was secured after the government reached a trade deal.

However, the nation's car industry cautions that automakers could soon confront a detrimental 10-percent increase in customs duties for electric cars crossing the Channel. Although Britain exited the European Union in 2021 with a last-minute free trade agreement eliminating tariffs on cars, the deal stipulates that, starting January 1, 2024, a minimum of 45 percent of the value of car parts must originate from Britain or the European Union to qualify for exemption from customs duties.

This poses a challenge for electric car manufacturers since their batteries frequently come from China, despite efforts in the UK to develop domestic production.