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The UK Battery Plant Industry

17 May 2023
With the road to NetZero and incoming UK legislation to ban the sale of new petrol and diesel cars from 2030 (and hybrids from 2035), gigafactories are an essential part of the strategy to transition from traditional combustion engine vehicles to electrication of vehicles.

Which is why the recent collapse of BritishVolt was particularly concerning.

The term 'gigafactory' refers to large scale facilities manufacturing batteries for the electric automotive industry. Traditional battery assembly plants assemble batteries from pre-manufactured components, whereas gigafactories produce the entirety of the battery from the raw components to the finished product. 

In this piece, we explore the detrimental effect of BritishVolt's collapse on the UK, while also considering potential opportunities to the production of battery cells in the UK. 

The UK landscape

The UK automotive manufacturing industry is worth approximately £14billion in added revenue to the UK economy and constitutes 10% of exports,  and the UK is home to around 20 research and development centres. It was posited as one of the key post-Brexit areas of excellence. Some car manufacturers (e.g. JLR) have or are building their own battery assembly plants in the UK to drive the transition to electric vehicles.  However, these are reliant on long supply chains from the raw materials to the manufacturers of the individual components. The battery industry relies heavily on compounds mined from a limited number of mines (e.g. cobalt) and so battery producers are looking to centralise production as much as possible given the limited resources and to limit the risks of supply chain issues that would hamper electric vehicle production. Not only will gigafactories be necessary for the car manufacturing industry but also HGVs, buses and grid storage. The Faraday Institution stated that the UK needs to build five gigafactories by 2030 to meet current electric car industry needs and capacity will need to be doubled to 10 by 2040.  

BritishVolt were a UK start-up manufacturer of lithium-ion batteries for the automotive industry and its flagship project, the construction of a gigafactory in Northumberland, began work in 2021.  The intention being that the gigafactory would produce and store high volumes of batteries.  However, only 9 months after breaking ground, BritishVolt went into administration. Following a tense few months, BritishVolt has been bought out by Australian firm Recharge Industries and the parties are near to completing a deal on building the gigafactory.  

What does this now mean for the UK?

Whilst the industry is hopeful Recharge Industries will resume the project, as it stands there is now only one gigafactory being built which is to serve the Nissan plant in Sunderland.  This puts the UK far behind Asia, Europe and the US in terms of gigafactory capacity and car manufacturers are looking elsewhere for manufacturing sites. Tesla recently opted for Berlin and BMW has announced that its electric mini will be manufactured abroad.

If the UK does not catch up with the creation of gigafactories then manufacturers will either need to be reliant on battery imports from abroad or they may move the whole process abroad to be near existing infrastructure.

Is there still opportunity on the horizon?

The UK Automotive Transformation Fund has set aside £1 billion for various industry projects and the UK government had offered Britishvolt a conditional £100m funding for its flagship Northumberland gigafactory which was never spent due to milestones not being achieved. If such funding can be unlocked, by Recharge Industries or other parties in this field, there is opportunity for the UK to catch up to its European neighbours.

There are a number of well known car brands still manufactured on UK soil – e.g. Jaguar, Land Rover, Bentley, Aston Martin as well as taxis and commercial vehicles (e.g. Stellantis announced a £100m investment in its Ellesmere Port electric van plant. ) The road to electrification presents real opportunities to build gigfactories near key manufacturing sites to keep existing manufacturers on UK soil. Domestic production of batteries will also limit dependence on Asian and European batteries and so reduce supply chain risks and trade costs associated with battery assembly plants.

The UK's electric vehicle strategy also presents related opportunities in research and development into electric vehicles and battery production, potentially with a focus on moving away from the finite and rare compounds used to power the current generation of electric vehicle batteries. 

All of the above would also create tens of thousands of skilled jobs in the battery production and electric car vehicle industries, as well as related opportunities in construction of the gigafactories, logistics and battery disposal and recycling. 

What next?

Although the collapse of BritishVolt has been a disappointing setback to what was only the beginning for UK based gigfactories, talk of Recharge Industries finalising a deal to continue BritishVolt's gigafactory is a promising sign and will hopefully recharge the UK's battery storage strategy. 

Further Reading