Around a third of the workforce is set to be axed at the Sunderland electric vehicle battery plant which supplies car giant Nissan, it has emerged.

The redundancies have been announced at the Envision AESC UK facility – the biggest facility of its kind in Europe – which is based at the Nissan plant at Washington.

It is understood that 130 jobs are at risk at the company which employs just under 400 people, delivering a bitter blow to the region’s clean technology industry at a plant which has been at the forefront of the electric vehicle battery sector.

A statement from Envision AESC confirmed: “Due to the global economic stagnation caused by the new coronavirus, demand across the automotive sector has decreased significantly.

“As a result, it is necessary to review headcount levels in Japan and the UK to match resource to the lower level of demand. In the UK, the business will soon launch an employee consultation process on proposals to reduce staff numbers.”

The move comes just over a year after the plant was acquired by new owners Envision AESC.

The plant was initially launched and run by Japanese car giant Nissan and was widely praised for creating more than 300 highly-skilled jobs in the fast-growing electric vehicle market.

It produces the lithium-ion battery packs that power the Sunderland-produced Nissan LEAF.

However the LEAF maker, which employs around 6,000 people in the North East, sold the facility in an undisclosed deal to Envision Group, a global digital energy company from China, in a deal which completed in April 2019.

Nissan had sold the battery business so it could concentrate on the development and production of electric vehicles, but maintained a 25% stake in the business as part of the deal.

The deal followed the collapse of a $1bn deal to sell it to Chinese invesment group GSR capital, but it fell through when Nissan pulled the plug on the transaction, following a number of delays and other setbacks.

When the Envision Group deal was first announced in August 2018 employees were reassured that all staff members would remain employed.

The city council worked with Nissan for many years to help put in place the infrastructure for electric vehicle production at Nissan Sunderland which resulted in the launch of the LEAF and important investment in the battery plant.

Figures released last year showed that the North East accounts for 20% of all electric vehicle production in Europe.

Earlier this week, Nissan reiterated that it will not be able to sustain operations at the Wearside plant if Brexit negotiations fail to establish a trade deal.

The 6,000 workers of the Sunderland plant breathed a sigh of relief last week when Nissan CEO and president Makoto Uchida announced plans to maintain core production at the site and improve efficiency.

However, a week after saying Sunderland remains an important part of the firm’s plans for the European business, Nissan’s global chief operating officer Ashwani Gupta warned the company would not be able to stand by its commitment to the Sunderland plant if the UK left the European Union without a trade deal that enabled tariff-free EU access.

Mr Gupta’s comments, made in a BBC interview, echo the statements issued by the Nissan’s European chairman Gianluca de Ficchy during a visit to the plant last October, when he said that export tariffs would put the car giant’s European business model in jeopardy.