Envision AESC to invest $458 million in Japan gigafactory to supply Nissan EVs

Battery producer Envision AESC has announced a Yen 50 billion ($457.9 million) investment to build a 6 GWh/year gigafactory near Tokyo to supply automaker Nissan.

Envision said Aug. 4 that the plant would be built in the Ibaraki prefecture north of Tokyo, with mass production due to start in 2024.

It added that the investment could increase to up to Yen 100 billion to increase capacity to 18 GWh/year after around five years.

Envision is automaker Nissan's battery partner, with Nissan Motors COO Ashwani Gupta saying that the new battery plant in Ibaraki of Japan was "another key strategic investment by Envision AESC and will support further penetration of Nissan EVs in Japan."

He added that Nissan aimed to achieve carbon neutrality throughout the vehicle life cycle by 2050, with accelerating the pace of electrification being one of the critical steps to achieve this.

It is unclear whether Envision and Nissan will jointly run the plant.

This is the second gigafactory recently announced by Envision AESC and Nissan, with the partners announcing a GBP1 billion ($1.4 billion) investment in Nissan's Electric Vehicle Hub, EV36Zero, in Sunderland, UK, in early July, which will include building an initial 9 GWh gigafactory.

A surge in gigafactory announcements

Many automakers are looking to build gigafactories to ensure battery supply for their EV supply chains.

On July 29, Hyundai Motor Group announced that it had teamed up with LG Energy Solution to invest $1.1 billion to build a 10GWh/year EV battery cell plant in Karawang, Indonesia.

Construction of the 50/50 joint venture gigafactory is due to start in Q4 2021, with completion expected in H1 2023 and mass production due in H1 2024.

The plant will power over 150,000 battery EVs, helping the Hyundai and Kia brands to secure a stable supply of EV batteries at a competitive price.

Earlier in July, Volkswagen said it was looking to build its third European gigafactory in Spain after the Spanish government approved a Eur4.3 billion ($5.1 billion) program to push electric vehicle production.

The automaker plans to build six battery factories in Europe with total annual production capacity of 240 GWh as part of its 2030 strategy.

Volvo Car Group and battery maker Northvolt also announced in June that they would join forces to build a 50 GWh/year gigafactory planned to start production in 2026, while Renault Group also said in June that it had partnered with Envision AESC and Verkor to develop batteries and build gigafactories in France.

Offtake agreements for raw materials

Automakers have also been signing offtake agreements to secure supply of battery raw materials, with Renault announcing Aug. 2 that it had signed a five-year offtake agreement with Vulcan Energy to secure 6,000-17,000 mt/year of battery grade lithium chemicals from the latter's Zero Carbon lithium project in Germany's Upper Rhine Valley.

Commercial delivery is expected to start in 2026, with the possibility of the five-year agreement being extended past 2031 if mutually agreed upon.

Renault has pledged to achieve carbon neutrality globally by 2050, aiming for over 65% of its sales mix to be EVs by 2025 and increasing this to up to 90% by 2030.

It said the agreement with Vulcan would allow it to avoid 300-700 kg of CO2 for a 50 kWh battery.