Spain could convert Nissan plant into battery factory to save jobs: Source

Nissan had planned to shut down its factories in Barcelona area by the end of last year but postponed the closures by a year to give more time for authorities to find another company interested in the units.
By : Reuters
| Updated on: 16 Feb 2021, 05:40 PM
Nissan factory (Representational photo) (REUTERS)
Nissan factory (Representational photo) (REUTERS)
Nissan factory (Representational photo) (REUTERS)
Nissan factory (Representational photo)

Spain is considering converting Nissan's main car plant in Barcelona, which is due to close in December, into a battery production facility for electric cars as one option to preserve thousands of jobs, a source familiar with the matter said.

The European Union is aggressively pushing for new battery production in Europe to reduce reliance on Chinese imports as carmakers ramp up production of electric vehicles to meet tough European emissions regulations.

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Nissan has three plants in the Barcelona area, employing around 3,000 people directly and 20,000 indirectly. It had planned to shut them down by the end of last year but postponed the closures by a year to give more time for authorities to find another company interested in the units.

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Its main plant stands on publicly owned land.

The regional government of Catalonia, where Barcelona is located, is backing a project to build a battery production and recycling plant in the region. The so-called Battery Hub project is seeking 6.8 billion euros ($8.25 billion) from Spain's 140 billion euro share of the EU's Covid-19 pandemic aid and will only go ahead if it secures the funding.

(Also read | Nissan in Spain faces heat as workers see red over plant closure plans)

Although Spain is yet to decide on the use of the funds, one of the options being considered by authorities is to locate the Battery Hub project at Nissan's main Barcelona plant, said a source with direct knowledge of the process.

The source said "many companies" had shown interest in Nissan's plants and authorities will take into account how many jobs can be preserved when deciding who can set up shop there.

File photo: Smoke from burning tires lit by demonstrators cover a logo outside the Nissan Motor Co. plant in Barcelona, Spain, on Thursday, May 28, 2020.
File photo: Smoke from burning tires lit by demonstrators cover a logo outside the Nissan Motor Co. plant in Barcelona, Spain, on Thursday, May 28, 2020. (Bloomberg)
File photo: Smoke from burning tires lit by demonstrators cover a logo outside the Nissan Motor Co. plant in Barcelona, Spain, on Thursday, May 28, 2020.
File photo: Smoke from burning tires lit by demonstrators cover a logo outside the Nissan Motor Co. plant in Barcelona, Spain, on Thursday, May 28, 2020. (Bloomberg)

A task force on the plants' future formed by Nissan, government and union representatives has set a March 31 deadline for submission of formal proposals for use of the facilities. It has said other possible options include an electric vehicle plant or another electric mobility-related project.

Finding a solution for the plants is in the interests of both the Japanese carmaker, which had received state aid and faced intense local opposition over its decision to shut them, and the national and regional governments hoping to preserve jobs.

(Also read | Nissan says 'not in talks with Apple' over autonomous car project)

Asked whether the Battery Hub could find a home at Nissan's plants, Pere Aragones, Catalonia's acting head of government, told Reuters: "That's one of the options that has been placed on the table but it's not the only one."

He declined to elaborate, but said Catalonia was an "excellent location" for a battery factory given the presence of carmakers, such as Volkswagen's Spanish unit SEAT.

The regional government has said the battery project is backed by companies from the mobility and technology sectors, without naming them.

The source, as well as Joaquin Cano, CGT union leader at Nissan, said the EU funds, if granted, would help to convince investors interested in the facilities.

France's Schneider Electric and South Korea's LG Energy Solution are among companies that have shown potential interest in Nissan's plants, another source said.

Catalan public channel TV3 has said LG's plan is to provide batteries for SEAT, which eyes electric car production at its main Barcelona-area plant in 2025.

LG Energy Solution and Schneider declined to comment.

Nissan Spain and the Spanish government said the process was confidential and would not provide further comment.

First Published Date: 16 Feb 2021, 05:40 PM IST
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