Nissan will produce two new electric vehicle models at its Sunderland plant, supporting thousands of jobs in the UK, the Government has confirmed.

The Japanese carmaker’s new electric Qashqai and Juke models will be manufactured at the site.

Nissan is making a “direct investment of up to £1.12 billion” to produce the two models, the Government said.

This will enable wider investment in infrastructure projects and the supply chain – including the construction of a new gigafactory to make more batteries – to bring “a total new investment today of up to £2 billion”, it added.

Prime Minister Rishi Sunak said: “Nissan’s investment is a massive vote of confidence in the UK’s automotive industry, which already contributes a massive £71 billion a year to our economy.

“This venture will no doubt secure Sunderland’s future as the UK’s Silicon Valley for electric vehicle innovation and manufacturing.

“Making the UK the best place to do business is at the heart of our economic plan.

“We will continue to back businesses like Nissan to expand and grow their roots in the UK every step of the way as we make the right long-term decisions for a brighter future.”

Nissan’s EV36Zero project brings together electric vehicle manufacturing, renewable energy and battery production.

The company’s president and chief executive Makoto Uchida said: “Exciting, electric vehicles are at the heart of our plans to achieve carbon neutrality.

“With electric versions of our core European models on the way, we are accelerating towards a new era for Nissan, for industry and for our customers.

“The EV36Zero project puts our Sunderland plant, Britain’s biggest ever car factory, at the heart of our future vision.

“It means our UK team will be designing, engineering and manufacturing the vehicles of the future, driving us towards an all-electric future for Nissan in Europe.”

The Government also announced it has awarded £15 million of funding to the Nissan Technical Centre in Cranfield, Bedfordshire, to strengthen its technical expertise and boost the research and development of zero emission vehicle capability.

Chancellor Jeremy Hunt said: “Today’s news is an enormous vote of confidence in the British economy, just days after we confirmed the most generous investment tax reliefs in the western world.

“Nissan has a proud history in car manufacturing in Sunderland, and their continued commitment to the UK shows how our support for business is getting results – helping create thousands of jobs and solidifying Britain’s place as the world’s eighth largest manufacturer.”

In his autumn statement on Wednesday, Mr Hunt announced that a tax break allowing firms to cut their bills if they invest in new equipment will be made permanent.

Business Secretary Kemi Badenoch said: “The investment by Nissan in Sunderland shows once again that the Government’s plan for the automotive sector is working.

“The forthcoming advanced manufacturing plan will build on this deal and other recent big investment wins for the UK car industry, helping to support thousands of jobs and drive growth across the UK.”

The plan will set out how the Government will encourage manufacturers to invest in the UK.

Sunderland Central’s Labour MP, Julie Elliott, said the investment meant the city had a “bright future”.

She said: “The decision by Nissan today is a great vote of confidence in the Sunderland plant.

“I am glad that the plant’s strong reputation for green technology continues.”