The Faraday Institution’s latest report on UK Gigafactories finds that they could support 35,000 jobs by 2040, along with a further 65,000 in the supply chain, but warns that the UK is not moving quickly enough. It’s time to put words into action and build the manufacturing capacity that we need to ensure that the UK not only catches up but becomes a world leader.
A question that used to be asked in every job interview was ‘where do you see yourself in five years? The interviewee almost certainly had a detailed list of aspirations to reel off in response If the same question was asked of the UK PLC in relation to the number of gigafactories it will have after that same period of time, the answer would be much shorter and to the point: ‘not enough.’
That’s a massive problem, because as the Faraday Institution’s ‘UK electric vehicle and battery production potential to 2040’ report makes very clear, the UK is rapidly falling far behind in the global race to build these strategically important assets that are vital to making transport more sustainable, reducing emissions, improving air quality, and delivering net-zero commitments.
With each gigafactory taking some five years to build1, there’s no time to waste, and in determining the way forward we learn a hard lesson learnt from the past: the lithium-ion battery was invented in the UK but the strategic importance of manufacturing them in the UK was overlooked. This is why today we have just one operational gigafactory which has a capacity of less than 2GWh. And by 2030 – the date that the new Labour government has pledged to ban sales of combustion engine vehicles, the UK is expected to have only three1 up and running.
That’s around half of what’s needed because the UK’s demand is expected to reach almost 110GWh a year in 2030 – the equivalent of six large gigafactories running at 90% capacity1. That also compares very unfavourably to the 40 expected to be operational in Europe by that time1, and more than 400 worldwide2.
Even if we broke ground today, the additional sites we need in the UK would only just be ramping up production volumes by the time the last petrol and diesel vehicles will be driven out of the showrooms. Which means that many of the EVs manufactured in the UK will use imported cells, while at the same time the UK will not be in a position to export these highly valuable items to other countries. Compounding the problem are the requirements of Rules of Origin regulations that from 2027 will require EVs made here to use cells manufactured in the UK or Europe to avoid new tariffs when sold in Europe.
And of course, as well as road transport, there will be huge demand for the cells needed to electrify other industries such as the aviation and marine sectors. It is absolutely vital to our future that we have a world-class battery industry here in the UK, together with a robust, transparent and sustainable supply chain to serve it. And we must be cognizant of the fact that while the UK is forecast to make only 53 per cent of the capacity it will need in 20301, the gulf is expected to grow, with only 29% capacity by 2040, by which time we’ll need some 200GWh of supply1.
A true centre of excellence in electrification
The transition from internal combustion engines running on fossil fuels to e-mobility powered by renewables represents nothing less than a paradigm shift, and we simply cannot afford to squander the opportunity to place the UK as the driving force behind it. Greenpower Park, the UK’s Centre of Electrification and Clean Energy, is a trailblazing centre of excellence for electrification, battery technology and manufacturing. With the West Midlands Gigafactory as its anchor tenant, it has unrivalled access to the most highly skilled workforce in the country.
This ground-breaking location is the first of its kind, offering an all-in-one solution for battery research, industrialisation, manufacturing, testing, recycling and electrified logistics designed to foster the UK’s growing battery ecosystem. Based in the country’s automotive skills heartland, it is at the epicentre of the country’s shift to electrification and is synonymous with both electric vehicle and battery manufacturing.
The automotive and manufacturing industries run through the blood of generations of the workforce in the West Midlands and will continue to do so in the future with the creation of Greenpower Park. Located closer to almost every vehicle manufacturer’s plant than any other proposed gigafactory in the UK, it is also adjacent to the world-renowned UK Battery Industrialisation Centre as well as nine universities and their 220,000 students. Greenpower Park represents a unique collaboration between academia, industry, government and international partners to create a complete ecosystem purpose-designed to boost accelerated development, growth and innovation across the e-mobility sector.
Tempus fugit: action this day
We believe that we can play a pivotal role in helping overcome the battery cell demand issue that’s coming in the next decade and beyond. But to do that we need to act now, and that involves laying out incentive packages to accelerate conversations with potential investors, and to enable us to achieve our goals within the battery manufacturers’ demanding investment timescales – and the vehicle manufacturers’ product development cycles.
We’ve put all the pieces in place to enable that to happen, and we are the UK’s only proposed Gigafactory site with Investment Zone Status. This offers a compelling package of incentives for investors, including Stamp Duty Land Tax Relief, 100 per cent Business Rate Relief on newly occupied premises, 100 per cent first year Capital Allowances for expenditure on new plant and machinery, zero rate employer national insurance contributions for 36 months for each new job created, enhanced structures and buildings allowance, and additional support for supply chain and skills development, innovation, and R&D. We strongly believe that with inward investment of £2.5bn we can build our state-of-the-art Gigafactory and create 6,000 highly skilled jobs.
We’re also highly encouraged by the new UK government’s pledge to directly invest in industry via the National Wealth Fund, reward firms that build their manufacturing supply chains in the UK via the British Jobs Bonus, and, in short, ‘secure the future of Britain’s automotive industry.’3 We urge the Prime Minister to deliver on those promises and help us to play our part in full.
The UK has always been a leader in designing and developing cutting-edge technologies, but hasn’t always fulfilled its potential in successfully mass-producing them. With battery cells and Gigafactories we have an unprecedented opportunity to change this. But we must act now if we are to seize it. Five years from now, we want the UK to be a globally competitive supplier of battery cells and securing the clean energy supply chain for the future, not asking why we allowed ourselves to fall further behind.
Richard Moore is Greenpower Park’s Battery Expert.
