Two British Battery Firms Unite to Work on Developing the UK’s First Gigafactory

Battery developers AMTE Power and Britishvolt have agreed to work together to evaluate the potential for a multi-billion-pound battery facility that would solve the problem of how to feed the rapidly growing call for electric vehicles (EVs) and power storage projects. The UK may be on course to deliver its first ‘gigafactory’.

Both firms have signed a memorandum of understanding which says that they will work together on plans for a plant to make lithium ion batteries, the crucial component in electric cars as well as energy storage products.

With the future of the UK automotive industry hanging in the balance, electric vehicle (EV) and battery makers are increasingly keen to co-locate production and to scale up production capacity with a new generation of ‘gigafactories’.

The two British start-ups are looking at investing as much as £4bn in building the UK’s first large-scale battery factory which could turn out to be a major boost to the country’s struggling car industry.

Both British firms share an ambition aimed at establishing and growing a domestic manufacturing supply chain for a “diverse portfolio” of lithium ion batteries, as transport moves towards electrification in order to support the UK’s 2050 net zero goal.

The two firms, which came together with the support of the UK’s Advanced Propulsion Centre (APC), are also working on their own plans to scale up battery making facilities.

The Advanced Propulsion Centre (APC), is a non-profit organisation that facilitates funding to UK-based research and development projects developing low-carbon emission powertrain technologies.

According to the Financial Times, Britishvolt, which was only founded in December, has five UK locations lined up for its own large scale facility and is looking to raise £1.2bn next year to bankroll the first phase of the project to generate 10GWh of batteries. They have received initial backing from Scandinavian and Middle Eastern investors

AMTE Power already operates a battery production facility in Thurso, Scotland and is planning for another large scale 1-5GWh per year factory that it expects to be in operation by 2023 with two potential sites identified in Dundee and Teesside.

The two firms told the Financial Times that there is even a possibility that their planned sites could be amalgamated in order to deliver a much larger-scale battery making facility.

The chief executive of Britishvolt, Lars Carlstrom, said the companies’ ultimate objective is to build facilities producing batteries with capacity of as much as 30 gigawatt hours (GWh) a year, which would be roughly equivalent to the joint Tesla-Panasonic Gigafactory in Nevada. He added that a factory of that size would create as many as 4,000 jobs. As well as providing jobs the project will also help to reduce the need to import battery components from Asia at significant monetary and environmental cost.

Currently, UK electric car manufacturing is greatly dependent on battery components from abroad which could potentially be a serious problem for the sector should trade tariffs emerge in the event of a no-deal Brexit. The new plans announced by AMTE Power and Britishvolt mark the first substantial effort to deliver large scale battery manufacturing capacity in the UK. Work is going on in other parts of Europe with Tesla planning a gigafactory in Germany and Swedish firm Northvolt raising $1bn for a similar facility in Sweden.

Lars Carlstrom, CEO of Britishvolt, said meeting the UK government’s goal to phase out sales of fossil fuel cars by 2035 or earlier and shift towards a low carbon electricity grid would “necessitate the unprecedented electrification of vehicles, and reliance on renewable energy will require extensive battery storage”.

He added:

“It is costly and carbon-intensive to have lithium ion batteries imported from the Far East, and this GigaPlant would cement a solid onshore supply chain to ensure quality and eliminate future uncertainty of supply.”

CEO at ATME Power, Kevin Brundish, said that the current Coronavirus crisis had only served to further draw attention to the need for the UK to have a robust domestic supply chain for batteries.

He said:

“The creation of a GigaPlant would place the UK in a strong position to service automotive and energy storage markets. The scalable production of lithium ion cells is key to electrifying vehicles and would drive new manufacturing revenues and new employment and can be built on AMTE’s focus on the supply of specialised cells, thereby continuing the country’s tradition of excellence in battery cell innovation.”

The UK’s Faraday Institution recently warned that the UK car industry could suffer serious consequences if more is not done to scale up the development of battery technology. The Faraday Institution is a 78m initiative set up through the government’s £274m Faraday Challenge fund to drive developments in battery technology. The commercial case for making cars could be seriously damaged if the UK continues to incur the high costs of importing batteries as vehicle producers switch to producing greater volumes of electric vehicles, and wind down internal combustion engine production.

Up to now both European and UK carmakers have tended to import battery cells from China and South Korea which are then assembled into packs to go in cars.

The UK’s growing EV market presents a huge opportunity and the group believes that the UK will need to build at least seven 20GWh gigafactories by 2040 to retain a large automotive sector. However, it is questionable whether there is the political and industrial will to make this happen.

The race is on all over the globe to secure supplies of lithium ion batteries as manufacturers try to meet both the increasing demand for electric cars and the government regulations that limit carbon dioxide exhaust emissions.

The deficiency in large-scale battery manufacturing facilities in the UK is causing concern over the future of the country’s automotive industry. Ralf Speth, the Jaguar Land Rover boss has expressed his concern and the Vauxhall owner, Peugeot recognises the increasing need to secure a supply of cells closer to home. Transport costs mean a battery supply close to car assembly plants is an attractive proposition for car manufacturers.

It seems that Brexit uncertainty may have affected the decisions made by battery producers. Despite the expected demand for batteries from UK car factories, some companies appear to have been unwilling to invest in the UK market. Recently the UK lost out on a major investment by Tesla. Elon Musk, the US electric carmaker’s chief executive, chose Berlin over a British location. Other battery producers such as Sweden’s Northvolt, South Korea’s LG Chem and China’s CATL have also built factories in EU countries.

Even with the impending Coronavirus recession hanging over us, Britishvolt is confident that it can raise funds as more investors look for green investment opportunities. Later stages of building could potentially focus on different technologies, such as solid-state batteries, as development continues.

As former general manager of Nissan’s battery plant, the new Battery Industrialisation Centre’s MD, Jeff Pratt, knows more than most about the challenges of manufacturing batteries at scale.

He is however optimistic about the UK’s prospects saying that:

“We definitely have the demand here. We’ve got some large OEMs such as Nissan in the north east and JLR in the midlands, and that’s just in automotive.  Provided we make it attractive for companies to invest in the UK and bring the large-scale manufacturing here there isn’t any reason why we shouldn’t get our share of that future investment.”