Nissan's commitment to building the UK's 'first mass-market electric car' has been welcomed by the government, who will hand the company a £20.7 million grant as it produces the LEAF.

Nissan will invest 420 million to safeguard and create more than 500 jobs in Sunderland for both the production of the LEAF and a new battery plant, with plans to make 50,000 vehicles and 60,000 batteries a year starting in 2013.

The LEAF, already being produced in two other countries, is a five-seater hatchback which Nissan claims will offer the same space performance and practicality of similar cars in its class, but without the emissions.

Vote of confidence

"This investment is a fantastic vote of confidence in the Sunderland plant and its excellent workforce," said Lord Mandelson.

"The automotive sector is of key importance to the UK. It supports R&D, technological innovation, skills and a supply chain that's a mainstay of the wider manufacturing sector.

"Today's news from Nissan, with support from government, shows that by working together we can achieve our aim of making the UK a world-leader in ultra-low carbon vehicles."

Dawn of a new era?

Andy Palmer, senior Vice President responsible for Nissan's global electric vehicle strategy, added: "The world is at the dawn of a new era in automotive transport. Nissan LEAF, which will go on sale later this year, is a five-seater hatchback that offers the same space, practicality and performance of a similar car in its class - minus the tailpipe emissions.

"Thanks to the UK's firm commitment to a low carbon future in terms of infrastructure, customer incentives and educational programmes, Nissan LEAF will be built at Sunderland, making the UK the third country in the world to produce this revolutionary car."