VS1 Cloud Blog

VS1 Cloud Blog

Nissan picks Japan, not Britain, to make Ariya electric car for EU

18th Dec 2020 | Manufacturing

TOKYO -- Nissan Motor has decided against manufacturing its newest electric vehicle in the U.K. for sale in the European Union, Nikkei has learned, over concerns that the automobile will face higher tariffs in the absence of a post-Brexit trade deal.

Instead, Nissan will ship the Ariya from Japan when the vehicle goes on sale in the EU next year.

Nissan initially considered making the Ariya at its Sunderland assembly plant in Britain. But London and Brussels have yet to sign a free trade agreement, even with the British exit from the EU set to be finalized at the end of the month.

Under a no-deal Brexit, British auto exports to the EU face a 10% tariff.

Japanese-made autos face only a 7.5% import tariff under the economic partnership agreement Tokyo signed with the EU, and the trade deal will abolish that duty in 2026.

Japan's EPA with Britain takes effect next month. It will abolish the auto tariff in a similar manner as the Japan-EU trade deal.

These circumstances led Nissan to decide in favor of exporting the Ariya from Japan for the time being.

The Ariya is the first new global EV from the Japanese automaker since the Leaf debuted a decade ago. The model will be sold in phases next year in Japan, Western markets and in China.

Ariyas bound for Europe and the U.S. will be made at Nissan's assembly plant in Japan's Tochigi Prefecture, north of Tokyo. Those sold in China will be manufactured locally.

Japanese companies in the U.K. are contending with Brexit-related risks ahead of the Dec. 31 end of the transition period. Honda Motor suspended operations at its Swindon plant for three days through Friday last week because of delays in parts delivery via containership.

Europe is shifting toward electrified vehicles. The U.K. will ban new sales of gasoline-only autos in 2030, while France will do the same in 2040. The EU has set a goal of having at least 30 million zero-emissions vehicles by 2030.

Nissan will direct that demand for EVs to Japanese production and develop the local supply chain for electrics.

By: Nikkei Asia