INTERVIEW: UK needs to secure EV battery supply chain - Britishvolt founder

New York — Europe, and particularly the UK, need to secure an electric vehicle battery supply chain in order to maintain a competitive edge in the sector, according to Britishvolt founder Orral Nadjari.

Earlier this week Britishvolt, which Nadjari founded with fellow Swede Lars Carlstrom, announced that it has shortlisted two possible sites for the UK's first battery gigafatory, with the preferred location in Wales.

In an interview with S&P Global Platts, Nadjari said that the coronavirus pandemic had created an opportunity for Britishvolt, as it highlighted the need for local supply chains.

The European Battery Alliance has called for investment in the value chain -- from extraction of raw materials all the way through to recycling at the other end of the value chain -- to build the industry and create job security.

"We are trying to get the show on the road in Europe by working across the European battery value chain," EBA's program director for industry, Thore Sekkenes, said in a recent interview with Platts.

Europe is playing catch-up with China in the race to create an EV battery supply chain. Localized supply chains have been brought to the fore in the wake of the pandemic, and its resulting disruptions.

As such the European Investment Bank expects to increase its backing of battery-related projects to more than Eur1 billion ($1.09 billion) of financing in 2020, matching the entire fiscal support of the last decade.

There are a clutch of developers in Europe all looking to bring lithium projects online to meet the region's forecast growth in demand from the nascent EV market.

Platts Analytics forecasts 2020 EV sales at 1.97 million units, down 11% on the year. By 2040, it expects sales of 46.7 million EVs. Even prior to the pandemic, Platts Analytics expected EV sales in 2020 to decline slightly year on year, almost entirely on account of a broader slowdown in China.

Nadjari, whose background is in banking, said that the fact that he and Carlstrom are new to the industry is a positive, as it brings fresh perspective.

Carlstrom has a background in the auto sector, and they believe their combination of experience makes them ideally suited to raise money and awareness through established industry connections. Nadjari added: "We have just appointed battery industry heavyweight Isobel Sheldon as chief strategy officer and head of the advisory board, bringing with her the wealth of technical expertise required to enable this project's success."

Nadjari said that the vision is to create a truly green and renewable battery supply chain in the UK and Europe, and hinted that the initial site could be the first of many. The rationale behind Wales as the preferred production site was partly down to the country's renewable ambitions.

In 2017, the Welsh government announced a target of meeting 70% of Wales' electricity demand from Welsh renewable electricity sources by 2030. In 2018 Wales reached the milestone of 50% of electricity consumption being generated by renewable energy, up from 19% in 2014 and 48% in 2017, according to latest government data.

Another strong attribute is the amount of space available in the country to build a structure that could be 1 km in length. As there are gaps in the current supply chain, this presents an opportunity to build out a local ecosystem for battery production.

It is the founder's vision to build a brand that firmly embeds the UK at the forefront of the electric revolution, a site that not only builds batteries as greenly as possible, but recycles them as well. Nadjari believes that, owing to the lack of local supply chain, recycling could be a bigger component to the story.

The battery market has begun to focus on how to recycle raw materials such as lithium as a source of raw materials going forward, with the EV transition gathering pace and all major automakers now fully committed to the technology.

"Let's not forget, we need old batteries to start a recycling phase," said one market source. "It's too early in the production and adoption cycle to have units coming back, once that starts to flow then recycling will take off, and it will need to in order for the whole transition to electric mobility to have as small an environmental footprint as possible."

Earlier this month European battery cell maker Northvolt (no relation to Britishvolt) and aluminum producer Norsk Hydro initiated a joint venture, Hydro Volt, for the recycling of battery materials and aluminum for the Norwegian EV market.

Hydro Volt will start operations in Fredrikstad, Norway, with a feed of batteries coming from the Norwegian EV market, one of the most advanced in the world, according to a statement from Northvolt.

The battery industry is forecast to be worth GBP5 billion ($6.3 billion) domestically by 2025, and the demand for lithium ion cells across a number of industries, including vehicle electrification, is already increasing dramatically.

"Things are heating up in the UK," said one market source. "There's no denying that electrification is the trend, and the UK will be a big market, we need local supply chains to manage net zero ambitions. Hopefully the coronavirus pandemic leads us to a greener, more sustainable future," he added.

There had been fears that the UK would lose out on battery investment after Brexit but local media reported last week that Tesla boss Elon Musk flew in to evaluate sites in the UK.