More than 2,000 jobs in the North East were secured today after Nissan decided to build a pioneering electric car at its Sunderland plant.

A five-seater mainstream electric car called the Leaf will be built in Sunderland from 2013, on the back of a £420 million investment from Nissan.

More than half of the investment will come from the state, with the Department of Business granting £20.7 million towards the project and the European Investment Bank loaning £197.3 million.

“It’s a significant vote of confidence for Sunderland,” Paul Wilcox, the managing director of Nissan in the UK, said.

The British factory will be only the third site earmarked to produce the clean cars after plants in Oppama, Japan, and the American state of Tennessee.

Mr Wilcox said that the decision would secure 600 jobs within the factory, which will also make the vehicle’s lithium-ion batteries. About 2,250 jobs would be secured across the whole supply chain, he added.

About 50,000 Leafs — or Leaves — will be built a year, Nissan said. The car is marketed as “the world’s first affordable, mass-produced, zero-emission car.”

The hatchback has a range of 100 miles and can travel at a top speed of more than 90mph.

One North East, a regional development agency, has pledged to install 619 charging points in the region, as well as dedicated electric vehicle parking spaces and priority road lanes.

Commenting on Nissan’s decision, Lord Mandelson, the Business Secretary, said: “This investment is a fantastic vote of confidence in the Sunderland plant and its excellent workforce.”

The Business Secretary, who has identified green automotive technology as a critical growth industry that will help the British economy to wean itself off its overdependence on the City, will also announce funding for Ford this morning to develop cleaner cars in the UK.

The car deal comes a day after Lord Mandelson earmarked an £80 million loan to a steelworks in Sheffield to help it to build a manufacturing facility for nuclear power plant components.

The loan to Sheffield Forgemasters is part of a strategy to equip Britain with the capacity to compete globally in innovative industries.

“Today we’re announcing a willingness to invest that will make the UK a leading provider in the nuclear and the low-carbon supply chain,” Lord Mandelson said in a speech.

Since becoming Business Secretary, Lord Mandelson has indicated that he wants to “actively support” business, in a departure from the Conservatives’ free-market approach in the 1980s.

Yesterday he said: “Margaret Thatcher wouldn’t have done it; John Major wouldn’t have; even Tony Blair I don’t think would have, but under Gordon Brown we’ve made a crucial break with past 30 years.”

Kenneth Clarke, Shadow Business Secretary, said: “There’s always been a contrast between Peter Mandelson’s rhetoric before an election and the history of government intervention over the past 13 years.

“He had a former stint as one of Labour’s trade and industry ministers at a time when British manufacturing had been allowed to decline at its fastest rate in our country’s history.”

Nissan has made cars in Sunderland since 1986 and produced 338,000 last year, with a workforce of 4,100. Every third car in the UK is built by Nissan.

The decision to build the Leaf comes after the car company said that it would cut 1,200 workers at the plant as it battled to cope with a downturn of sales.

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Source : Times