In a Gateshead factory, engineers are carefully winding metal wires around iron cores destined for electric motors. These aren't just any motors - they're compact 'pancake motors' that generate higher torque than your average run-of-the-mill motor, perfect for supercars or construction equipment. This is the north-east England automotive industry, a sector that has weathered everything from Margaret Thatcher's investment charm offensive to Brexit, and now Andy Burnham's reindustrialisation strategy. Because why would anything be simple?
Across the factory, owned by US-based Turntide, more workers are prepping tools to assemble 2.5-tonne prototype battery packs for Hitachi's hybrid trains, also set to be built in the region. This bustling facility is a testament to the ripple effect from the area's automotive epicentre: Nissan's Sunderland plant, a mere 15 minutes down the road. Turntide's very existence here owes a debt to its larger neighbour - Hyperdrive, now part of Turntide, got its first batteries from a factory supplying Nissan. It's a classic tale: big manufacturer brings stable jobs, sparks local growth, and everyone lives happily ever after. Or at least, that's the theory.
But the reality is a bit more fraught. Four decades after opening in 1986, Nissan's underutilised Sunderland plant - currently running at barely half capacity - is pinning its hopes on a deal to build cars for China's Chery. The deal, still unconfirmed, couldn't come at a better time. The plant, once the crown jewel of Thatcher's investment drive, produced 507,000 cars in 2016, nearly matching its 2012 peak of 510,000. Andy Palmer, former Nissan global COO, called it 'the shining star globally for Nissan in the manufacturing world.' That was then.
Nissan has had to fight to survive, closing its Spanish plant in 2020 (later sold to Chery). Survival, Palmer notes, was 'no mean feat' given everything thrown at it. The challenges are legion: pandemic, supply chain chaos, protectionism, Chinese rivals, and the massive cash demands of electric transition. But Sunderland's industry became a symbol of a uniquely British headache: Brexit.
The Brexit vote unleashed a decade of political turmoil and uncertainty, with carmakers fearing a 'no deal' exit that would slap tariffs on the UK's biggest export market. Nissan eventually got £61m in secret state aid, followed by £101m in late 2022. The no-deal catastrophe was averted, but twin Brexit threats loom this year. First, EU rules of origin require electric cars made in Britain to use batteries made in the UK or EU to avoid tariffs - and vice versa. These rules, part of the 2020 deal, aimed to spur local battery production. But many battery projects have collapsed, leaving the industry short on European supply. Nissan sources batteries from next-door AESC, but the rules also demand crucial cathode materials come from Europe. That's proving tough, so the industry is pushing for a second extension of the deadline. Some insiders doubt it'll come before December, as the EU uses it as leverage.
Second, the EU's Industrial Accelerator Act will limit public procurement and subsidies to cars 'made in EU' to protect against China. British factories would be locked out under the current draft. UK and EU companies (who own most UK car factories) want the UK included. Nissan, which declined an interview, has privately warned the government that Sunderland's future is at risk. Palmer puts it bluntly: 'It's not a slam dunk that Nissan will survive... If made in Europe excludes the UK then I think it's existential for Sunderland. Sunderland will die.'
David Bailey, professor of business economics at the University of Birmingham, sums it up: 'Brexit keeps bringing up these uncertainties. The world is changing, and the EU responds to that, and that affects the UK.'
The big carmakers are also lobbying to water down electric vehicle targets, known as the ZEV mandate. Current rules require battery cars to be 80% of sales from high-volume manufacturers, but the government this month announced a possible reduction to as low as 50%. Nissan, an electric pioneer, has invested heavily in the electric Leaf and Juke crossover. Yet it would welcome lower targets after reportedly shelving an electric Qashqai, wary of weak demand. It also eyes selling new petrol cars beyond the 2035 ban.
Some analysts think delaying the electric shift is suicide, handing the market to Chinese competitors. Colin Walker of the Energy and Climate Intelligence Unit warns: 'Embracing this new technology represents the best chance that manufacturers have to survive and thrive in an electrified world. Pushing increasingly obsolescent technologies will only hasten their demise and would be a recipe for factory closures and mass redundancies.' A Nissan spokesperson insists they're 'committed to a fully electric future' but says the mandate 'must align with real-life consumer EV demand to ensure a gradual transition... while supporting the competitiveness of UK automotive manufacturing.'
Meanwhile, Nissan is undergoing a painful global restructuring, with CEO Ivan Espinosa closing seven factories and cutting 20,000 jobs. If the Chery deal goes through, Nissan would build cars for the Chinese maker (which also produces Omoda and Jaecoo brands). Nissan would still own the plant, employ the workers, and utilise spare capacity - it only managed 273,000 cars in 2025. Some experts doubt Chery will confirm without Brexit issues resolved. Unite union, however, is pleased, seeing it as a way to keep volumes up and preserve jobs.
For Turntide, the north-east still offers what it needs. David Orgill, VP of global operations, says: 'Why not here? Why not in the north of England? The supply chain is fantastic up here.' Turntide's parent, backed by Bill Gates's Breakthrough Energy Ventures, BMW, and Amazon, combined three UK businesses to expand sales. Expecting surging demand for its pancake motors (officially axial flux motors), it plans to boost production to 12,000 motors a year by 2028. 'We're expecting to grow significantly in the next 18 months,' Orgill says, 'We're actually able to pull back a lot of the capability and manufacturing back into the UK.'
The survival of the Nissan plant is politically crucial, which may explain why the government is weakening the mandate. Kim McGuinness, Labour mayor for the north-east, calls Nissan 'absolutely fundamental' to the regional economy and the country's automotive position. She highlights Sunderland's thriving city centre and new metro extension to Washington. She's hopeful devolution will attract more jobs and counter the 'left behind' feeling that drove Brexit and the rise of Reform UK, which won Sunderland council in May. 'People like me can give local residents more say. I believe that is the way that we combat Reform.'
Even with the Chery deal, the industry faces a long road back to its heyday of half a million cars. But it's survived before. Prof Colin Herron of Newcastle University admires the plant's resilience: 'The resilience of the people at that factory is incredible. Now they're entering a new phase.' Indeed, the road from Brexit is long, winding, and littered with potholes, but at least the pancake motors are spinning.