Nissan has warned that it could be forced to close its car production factory in Sunderland if the UK is frozen out of new European Union manufacturing rules.
The European Union has unveiled new "Made in EU" rules that are designed to protect businesses and manufacturers across the continent from growing competition from abroad, notably from China.
The move has been met with sharp criticism from the UK's main automotive body, which accused the European Union of damaging terms set out in the Brexit deal, as well as harming competition between the two.
Reports suggest that Nissan has now issued a warning that it could close its facility in Sunderland if the UK is excluded from "Made in Europe" rules.
READ MORE: EU 'discriminates' against UK car production with new rules as scheme could 'BREACH' Brexit deal
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The Financial Times reported that Nissan executives warned of an "existential threat" if the UK is "frozen out of access to EU incentives".
Nissan's facility in Sunderland employs around 6,000 workers, and a further 30,000 in the wider supply chain.
It recently benefitted from billions of pounds in investment to transform the facility and begin manufacturing the new electric Leaf.
Nissan said it was "pleased" that the European Commission had acknowledged the importance of foreign trading partners for the supply chain.
Nissan has warned that it could be forced to close its Sunderland facility as a result of EU rules
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However, it added: "Using a different definition for corporate fleets and the small‑car super credit creates confusion and adds unnecessary complexity for the industry."
The new "Made in EU" rules require vehicles for corporate fleets and small electric vehicles to be assembled in the EU, although there are exceptions for Nissan, Jaguar Land Rover and Toyota.
A UK Government spokesperson said: "The UK is a close and trusted European partner, committed to our shared security and economic co-operation.
"Now is the time to work together as like-minded partners to boost growth, resilience and economic security."
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Production of the new Nissan Leaf started in Sunderland at the end of 2025 | NISSANThe UK's automotive trade association, the Society of Motor Manufacturers and Traders (SMMT), has warned of serious consequences to the UK market if the UK is excluded from the new Made in EU rules.
Mike Hawes, chief executive of the SMMT, said the EU was "discriminating" against the UK car industry with the Industrial Accelerator Act (IAA),
He called on the EU and UK Government to "work together urgently to resolve the situation", which would make the UK a "full, trusted partner".
"This is not just to ensure choice for British and European consumers - especially in zero emission vehicles - but to deliver the economic growth and security everyone craves," Mr Hawes said.
The Sunderland plant has provided more than 6,000 jobs | NISSANNissan started manufacturing the new third-generation Leaf electric car in December last year as part of its EV36Zero vision, with EVs being manufactured on Line Two for the first time.
Speaking at the time, Business and Trade Secretary Peter Kyle described Sunderland as the "beating heart of the UK's automotive industry".
The Nissan Leaf benefits from Labour's Electric Car Grant with drivers receiving a huge £3,750 discount for the British-built car, with prices of the 75kWh model starting from £32,249.
The electric SUV has a staggering range of 386 miles, with Transport Secretary Heidi Alexander noting the original Lead as helping "piomeer early EV ownership".