Going giga: how the UK is investing in supersized battery production  

Both parties produce lithium-ion batteries for the automotive and power storage markets. The MoU means AMTE, established in 2013 to serve the high-performance end of the automotive sector, and start-up company BritishVolt, which focuses on mass-produced electric vehicles and was only launched at the end of 2019, will work together to develop two new plants as part of a £4bn investment programme.

AMTE currently has a facility in Thurso, Scotland, but is looking at potential sites in Teesside and Dundee for its new plant. BritishVolt recently announced it had signed another MoU with the Welsh Government after identifying a former RAF base in South Wales for its proposed 10GW annual capacity facility – with the potential to add a further 20GW by 2027.

“The Welsh Government has welcomed us with open arms and impeccable due diligence, and the region meets vital criteria including import/export accessibility, availability of labour and skilled staff, along with convenient geographical proximity to customers and local industrial companies,” Sheldon continues.

The site, which the company says will employ up to 3,500 when fully operational, will supposedly a local ecosystem of 10,000 to 15,000 further jobs for the wider supply chain, including material suppliers, contractors, and local services. When finished, the project will be on the scale of the Tesla-Panasonic facility in Reno, Nevada, and will be powered by its own 200MW solar park.

Sheldon believes the solar park will secure a near carbon neutral electricity input. “Our ambition is to become one of the greenest battery producers worldwide,” she adds. BritishVolt says it hopes to produce enough battery packs for more than 100,000 electric cars a year once completed.

By the end of July, BritishVolt had enlisted the help of Pininfarina, a celebrated Italian design studio with expertise in the automotive sector, to create the green facility. Specification will include the use of sustainable materials, constructed in a way that reflects the local environment and culture. Construction on the proposed 2.7 million square foot plant will begin in mid-2021, with the site becoming operational in 2023 under current plans.

Although AMTE’s new facility won’t be on the scale of that of BritishVolt, they are looking to expand their operations significantly.

“We've designed our factory with renewable energy sources in mind, to ensure a low carbon energy input. Scotland is an extremely desirable option for our gigafactory for this reason, considering over 50% of its energy is derived from renewables,” Brundish says.

He adds that the site, which will compliment that in Thurso, will produce “highly specialised products, servicing the niche automotive and energy storage markets.” It is hoped it will be operational within the next two to three years.

The spectre of Brexit and the Covid-19 pandemic have refocused minds within the automotive sector in recent months, drawing attention to the fragility of battery supply chains.

“Both the pandemic and Brexit have served to highlight the critical nature of onshoring manufacturing capability,” explains Brundish. “The pandemic has highlighted the importance of having supply chains closer to home. It is costly, involves the transportation of hazardous goods, and it is carbon intensive to have lithium-ion batteries imported from abroad. Whereas creating our own onshore gigafactory would ensure quality and eliminate future uncertainty of supply.”

Sheldon shares his view, saying that the pandemic has shown that having carbon-intensive lithium-ion batteries imported from the Far East can be risky and extremely costly in the electric vehicle industry. “By building out our very own infrastructure and supply chain ecosystem, we have the opportunity to advance battery production in the UK and Europe and cement a solid onshore supply chain to ensure quality and future certainty of supply.”

Concerns over supply have been echoed by the automotive sector in recent months. A little over a year ago, Jaguar Land Rover CEO Dr Ralf Speth fired a warning shot at the UK, saying it needed a factory on the scale of that of Tesla’s if it were to fully embrace the electric car revolution. He added: “The UK Government can play a critical role to encourage foreign investors to come to the UK.”

As the pandemic took hold in February, Jaguar, along with several other vehicle manufacturers, had to halt production of electric vehicles, although it is not clear this was a direct result of the global event.

Speth’s call for government action is supported by Brundish. “Considering that in five years’ time, the domestic battery market will be worth £5bn, the UK Government should invest in British manufacturing capabilities sooner rather than later,” he says. Over the last 10 years, electric car sales have soared from 17,000 on the road in 2010, to 7.2 million in 2019.

By 2026, it is expected that one in five vehicles will be electric in the UK, largely driven by net-zero targets. This, Brundish suggests, will lead to demand for lithium-ion batteries to “skyrocket”.

“Automotive batteries are expected to be the fastest growing end-user for the lithium-ion market worldwide, and the UK Government can become leaders in Europe with enough onshore investment,” adds Sheldon.

For all of its uncertainty, Brexit is offering some hope according to Brundish. He believes that questions over the UK’s future relationship with Europe and the lack of any concrete trade deals with other major global economies, at present at least, is feeding into the reluctance of other large battery manufacturers to invest but opening opportunities for UK-based operations thanks to the “favourable” geographic location – on Europe’s doorstep.

As well as the electric vehicle market, Brundish is optimistic for the future of the UK storage market too. He says: “We believe the energy storage systems market will be equal in opportunity to automotive, with demand for renewable residential and grid storage systems set to rise steeply as we transition to green energy.”

As the UK, like many other economies, looks to rebuild, the future of sites like these will be increasingly important. New car production, a major economic contributor to many countries, is already under threat in the UK. Failure to increase the level of domestic battery production will only jeopardise its survival further.

If the UK is to counter those challenges, it needs to support manufacturing initiatives, particularly given its commitments under the Road to Zero initiative. Additionally, as renewable power continues to extend its dominance within the UK’s power mix, battery storage will become increasingly critical, and competitive. The question is, while demand is there, can the government supply?