An employee assembles parts on the passenger doors of new Nissan automobiles as they travel along the production line at the Nissan motor vehicle assembly plant in Sunderland, UK

Chris Ratcliffe | Bloomberg | Getty Images

Nissan on Thursday announced plans to build a £ 1 billion ($ 1.38 billion) gigafactory in Sunderland, UK, to significantly boost the country’s electric vehicle plans.

The Japanese automaker announced that it was co-launching the project, called the Nissan EV36Zero, with Envision AESC, a battery technology company, and Sunderland City Council.

Nissan, which has been manufacturing in Sunderland for 35 years, said the hub would create 1,650 new jobs: 900 at Nissan and 750 at Envision AESC.

Speaking to CNBC’s Squawk Box Europe on Thursday, Nissan’s Chief Operating Officer Ashwani Gupta said the move demonstrates “our roadmap to… carbon neutrality”.

So-called gigafactories – a term coined by Tesla CEO Elon Musk – are systems that manufacture batteries for electric vehicles on a large scale.

Nissan is joining a number of other major auto companies trying to focus on developing batteries for electric cars.

Earlier this week, French automaker Renault announced that it had signed “two major partnerships” related to the development and production of batteries for electric vehicles.

Volkswagen announced in March that it would set up several gigafactories in Europe by the end of the decade.

Lack of chips

While his discussion with CNBC centered on Thursday’s announcement, the global chip scarcity is a reminder that the automotive sector, like many others, is still facing headwinds.

Gupta admitted that the semiconductor situation was a “challenge not only for Nissan, but for all automobile manufacturers”.

“But let me say that is post-pandemic [the] new normal because we plan our supply chain based on predictable scenarios, and that is [an] unpredictable scenario. “

Nissan has started working on its digital supply chain system, he added, and how to improve its forecasts for better planning.

Gupta was nonetheless optimistic about the future prospects of his company. “We’re bringing our new products to market as planned: we said we would have 12 products out there in 18 months, and that’s us,” he said.

He added, “Although we’re making a small production adjustment … on the other hand, it’s a good problem that we can solve, namely, not how to sell the car, but more about how to make the car. So we have a good problem to solve and we will solve it and we will solve it. “