AESC has received a funding boost after a £1bn guarantee from National Wealth Fund (NWF) to build a gigafactory to manufacture batteries for electric vehicles, with the capacity to produce enough to power 100,000 EVs each year, potentially a six-fold increase on the country’s current capacity.

Japanese-headquartered AESC will build the facility in Sunderland after the NWF and UK Export Finance provided financial guarantees which unlocked £680m in financing from banks including Standard Chartered, HSBC, SMBC Group, Societe Generale and BBVA. This will cover construction and operation of the new plant. The remaining £320m has been secured through private financing in addition to new equity provided by AESC.

In addition to the £1bn investment, the Government’s Automotive Transformation Fund is also investing £150m in grant funding.

The news follows the economic deal secured with the US that reduces car export tariffs from 27.5 per cent to 10 per cent and will apply to a quota of 100,000 UK cars – almost the total exported last year.

Shoichi Matsumoto, CEO of AESC, 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 resilient, sustainable supply chain.”

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