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UK in discussions for more gigafactories to ensure battery supply: reports

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UK in discussions for more gigafactories to ensure battery supply: reports

Highlights

Seven 20 GWh/year gigafactories required in UK by 2040

More battery manufacturing capacity needed to meet future EV demand

Number of government initiatives, more investment required

The UK government is reportedly in discussions with a number of companies regarding the construction of gigafactories to ensure enough battery manufacturing capacity for the British automotive industry to meet future electric vehicle demand.

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Talks are currently taking place with six companies -- Britishvolt, Ford Motors, Nissan, LG Corp., Samsung and InoBat Auto -- the Financial Times reported June 16.

The UK government has pledged to ban the sale of new petrol and diesel cars by 2030, which should exponentially increase the number of batteries required for EVs.

S&P Global Platts Analytics forecasts that the UK's plug-in light duty EV sales will rise to 958,000 units in 2030 and 1.3 million units by 2040, up from 175,000 units in 2020.

Faraday Institution chief economist Stephen Gifford told Platts that the UK was expected to have enough EV and battery demand for seven 20 GWh/year gigafactories, or around 140 GWh/year, by 2040.

The Faraday Institution is the fundamental research-focused element of the UK Government's Faraday Battery Challenge initiative.

While he understood the government was in talks with about six companies, Gifford clarified that the Faraday Institution did not get involved in commercial discussions.

A Nissan spokesman told Platts that, having established EV and battery production in the UK in 2013 for the Nissan LEAF, the company's Sunderland plant had "played a pioneering role" in developing the EV market.

"As previously announced, we will continue to electrify our line-up as part of our global journey towards carbon neutrality, however we have no further plans to announce at this time," the spokesman added.

A Ford spokesman responded that the company would confirm the battery supplier for its Transit Custom range closer to launch.

Ford said June 16 that it had increased its investment program to boost EV production over the coming decade. It also invested in Solid Power's $130 million Series B investment round in May to secure batteries for its future EVs.

Britishvolt is the only company on the list already planning a UK-based gigafactory, with construction due to begin imminently in Blythe, Northumberland.

The plant is due to start producing battery cells by Q4 2023 and reach a full capacity of around 30 GWh in 2027, equating to enough cells for around 300,000 vehicles.

Britishvolt chairman Peter Rolton told Platts that the company was focused on delivering the UK's first full-scale lithium-ion gigaplant, with plans fully on track and a decision on planning likely to be made as soon as July 6.

"Noise in the market of more gigaplants on the horizon in the UK can only be seen as a good thing, an acknowledgement that what we are doing is the right thing to do," Rolton said.

"With regards to our own expansion, we are currently looking at a second site in North America where demand, as in Europe, is set to rocket," he added.

A separate market source that did not wish to be named said, "There's a lot of hype and hearsay at the moment about multiple entrants coming to the UK to establish gigaplants. All I know is that without government aid the UK is going to struggle to establish itself as a battery hub, and that will be a real shame."

Government investment

To promote battery development, the UK government has already invested in a number of initiatives, including the Faraday Battery Challenge, which was launched in 2017 and has been funded with GBP318 million ($443.7 million) to March 2022.

It comprises three elements: the Faraday Institution; InnovateUK, a business-led collaborative R&D program; and UK Battery Industrialization Centre (UKBIC), which is an open access manufacturing facility where businesses can learn how to scale their technology.

Gifford said that the Ten Point Plan for a Green Industrial Revolution had "committed up to GBP1 billion to support the electrification of UK vehicles and their supply chains, including developing gigafactories in the UK to produce the batteries needed at scale."

The first half of this investment was due to be announced this parliamentary session, he said.

Gifford said that there was also funding towards the Advanced Propulsion Centre, which facilitates the UK government's Automotive Transformation Fund -- a new program aimed at establishing a competitive and sustainable UK supply chain by offering funding for capital and associated industrial research projects.

"This will be to support the industrialization of a high value, electrified automotive supply at scale in the UK," he said.

The next part of the Faraday Battery Challenge program is due to be decided in the autumn through the 2021 corporate social responsibility process, Gifford said.

Zero Carbon Futures managing director Dr Colin Herron said previously that more allocated funding for gigafactories and battery infrastructure was required if the UK government was serious about levelling up, tackling climate change, and creating skilled employment.

"Announcements are great but as a nation we need to deliver... Without gigaplants, we could witness an industry lost. However, by deploying funds in a timely fashion, with minimum bureaucracy, the government could really nail down the future of UK plc," Herron said.