A cross-party Committee of MPs has signalled that the UK government must urgently create an attractive environment for electric vehicle (EV) battery production.
Detailed within the newly released Batteries for electric vehicles report, the Committee believes that a lack of support from the government has led to a decrease in attractiveness for EV battery investment. Because of this, the UK is falling behind its global competitors.
The report also stated that the UK faces a “huge gigafactory gap” with less domestic battery production capacity than needed for the nation’s future needs.
Readers of Current± may well remember that the UK’s battery gigafactory prospects took a major hit at the start of 2023 with news that Britishvolt, a UK battery manufacturing company, had gone into administration.
The battery company was looking to build the UK’s first lithium-ion Gigafactory in the Port of Blyth in Northumberland. There were 300 people employed by the company to deliver the £3.8 billion battery factory.
However, the report outlined that there is now an opportunity for the UK to become considered a market leader in EV battery manufacturing. Should the nation focus its attention on the “midstream” refining process for critical materials such as lithium, it could establish the UK as a frontrunner in building sustainable and ethical batteries.
This could be a major opportunity in Europe, particularly when you factor in that China currently accounts for 78% of the world’s cathode production, a key component in the anatomy of an EV battery.
China’s “almost monopoly” in global green supply chains sparked concerns last week from the Royal United Services Institute (RUSI) which argued that the nation risks becoming “too reliant” on China for its renewable transition. This overreliance by the UK and other European countries means they are at the mercy of China for its net zero transition – something that could be devastating should relations deteriorate.
Government makes strides to bolster green sector manufacturing
It is worth noting that the UK government is taking strides to solve EV battery manufacturing issues and attempting to raise the country’s attractiveness in comparison to other international markets. This can be seen via the £960 million that was allocated to a Green Industries Growth Accelerator last week (17 November) which will be used to bolster green manufacturing, including the EV and battery sectors.
The government stated that this would “enable the UK to seize growth opportunities through the transition to net zero, building on our world-leading decarbonisation track record and strong deployment offer”.
All eyes will now be on the release of the UK Battery Strategy which is expected to be published in the coming days and will outline the government’s perspective on the future of UK battery manufacturing.
Liam Byrne, chair of the Business and Trade Committee, said: “Right now, the UK is on course to secure barely half of the electric battery capacity needed by the domestic car industry alone. Unless we fix this fast, we risk the industry simply relocating to Europe or the US or becoming reliant on imports from China and elsewhere. That imperils 160,000 jobs and a jewel in the UK’s industrial crown. Now is the time to act.
“We are unlikely to be able to compete with Brussels, Bideonomics or Bejing when it comes to subsidies. But we can still take decisive action. We desperately need a 10-year strategy that boosts subsidies, creates secure access to low-cost power, designates key sites for gigafactories, fixes the skills gap, delivers tariff-free trade, de-risks access to critical minerals and offers long-term R&D for the industry.
“Our competitors have hit the accelerator on battery investment, and we’ve been left in their wake. The next round of investments by car makers in their factories will be decided by local battery manufacturing capacity. Boosting support for gigafactories is not enough; the government must cultivate a more appealing investment environment for battery producers before it’s too late. We must act urgently if we are to safeguard British automotive jobs and secure this critical industry for the future.”