MPs have called on the government to “urgently create” an attractive environment for electric vehicle (EV) battery production in the UK or risk falling behind competitors.
The UK faces a huge “gigafactory gap”, with less battery production capacity than needed for the nation’s future needs, according to a report from the cross-party Business and Trade Select Committee. If the gap is not plugged, the committee says, automotive production in the UK could decline, putting hundreds of thousands of jobs at risk.
Using low-carbon energy sources, the UK could become a major centre for “midstream” refining processes for critical materials such as lithium.
Doing so would establish the UK as a “frontrunner” in building sustainable and ethical batteries, compared with those from China and European countries, the report found.
Currently, China accounts for 78 per cent of the world’s cathode production, and its dominance over large parts of the battery supply chain leaves battery makers exposed if exports of battery materials and components are restricted.
The government informed the committee that it plans to publish an advanced manufacturing plan in the Autumn Statement tomorrow, and that it is working on a UK battery strategy. The UK’s comparative advantage in clean energy and new battery technology should be leveraged in these plans, the report concluded.
Other recommendations included better government backing for agreements to set up new gigafactories, prioritising them for infrastructure improvements, and boosting support for domestic critical mineral mining.
Liam Byrne, the committee’s chair, said: “Power was at the heart of the Industrial Revolution and it will be at the heart of the green industrial revolution. But 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.”
In March, the Society of Motor Manufacturers and Traders warned that the UK needed to rapidly scale up its EV manufacturing capacity or risk being overtaken by international rivals. It said a new strategy should be implemented to lower the risk of investing in the EV sector with more competitive incentives, as well as action on energy costs and support for the next British ‘unicorns’ developing next-gen batteries and renewables.
“We are unlikely to be able to compete with Brussels, Bidenomics or Beijing when it comes to subsidies,” Byrne added.
“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; 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.”
In July, Tata Group announced plans to build a £4bn gigafactory with the ability to produce around 40GWh a year, making it one of Europe’s largest battery cell manufacturing sites.
Why the stakes for EV makers just went stratospheric
UK car makers will have to address some crucial challenges around battery production if they’re going to survive in an age of electric vehicles.