Manufacturing has for many years operated on just-in-time delivery. But when it comes to getting new UK gigafactories in place to manufacture batteries, these facilities cannot come soon enough to support production of homegrown EV vehicles and preserve UK automotive jobs.
Proposed gigafactories in Coventry in the West Midlands and Blyth in the North East are vital to the future of UK automotive manufacturing. If we want to power up to level up our regions, we need to get behind these major developments, but also not lose sight of the challenges and opportunities along the way.
Here are five considerations for the battery manufacturing journey.
- The UK is in an international battery space race with other countries – more Government investment is needed. So far £500 million is on the table from the UK Treasury. It’s easy to see that figure is not enough when the cost of one gigafactory could be £2 billion. The Coventry site needs to attract a battery occupier that will be being courted by many other countries in Europe. And the stakes couldn’t be higher because, when it comes to gigafactories and renewables, it is increasingly about those countries that own the means of production and generation calling the shots. This is shaping global geopolitics against the backdrop of the climate emergency and the transition to net zero.
- 2026 at the latest is the target to get UK battery production on line. Under the Brexit trade agreement by 2026 EV batteries assembled by UK firms will only be allowed to contain 50 percent of international content or face crippling tariffs on EV exports. Car manufacturers will need to prove that at least 40 percent of the value of the parts in a finished vehicle originate in the UK, or face paying export fees.
- Battery production requires sophisticated global and UK logistics. It would be great to drive cars powered on a battery made in Coventry using a bit of Cornish lithium. That could be an excellent British story of manufacturing and minerals. But you can’t make batteries without China. Batteries need cobalt from the Democratic Republic of Congo (mines owned by the Chinese) and rare earth minerals from China. The likelihood is that battery cells will be imported into to UK for assembly. This requires sophisticated global logistics – that’s something to be celebrated as well as the additional jobs it will bring at UK ports and distribution centres.
- But let’s not also forget hydrogen vehicles. Writing in the FT recently Andy Palmer, the former CEO of Aston Martin who is a vocal advocate of EV cars, urged caution that electric is not the only way to a cleaner transport future. He highlighted hydrogen’s ability to deliver better efficiency for buses as well as heavy goods vehicles.
- Gigafactories are rightly attracting the focus of some, but not enough, politicians. Beyond Metro Mayors and candidates for these roles, have we heard enough from MPs and local politicians? These facilities together with the property and infrastructure required to support them are a key part of preparing for a net zero society and creating new green collar jobs. Whether that’s in the manufacturing facility or the supply chain that supports it. If Government at all levels and industry can get behind battery tech, we may power up parts of the UK that desperately need a slice of a net zero industrial future.
Matt Sutton is a director at Camargue