30 Oct Why Britain desperately needs eight new ‘gigafactories’ to save its car industry
Minutes after he entered Downing Street as Prime Minister for the first time, Boris Johnson made a point of singling out one area where British scientists were, in his words, “leading the world”: electric vehicle batteries.
“Our United Kingdom of 2050 will no longer make any contribution whatsoever to the destruction of our precious planet brought about by carbon emissions,” he said. “We will be the home of electric vehicles – cars, even planes – powered by British-made battery technology being developed right here, right now.”
Since then, the Prime Minister has doubled-down on the claims, pointing to regions such as the West Midlands where, he claims, “we are seeing a 21st century industrial revolution in battery technology” that is helping fuel demand for electric vehicles.
Johnson’s optimism is welcome – but experts warn it may be overblown.
With Brexit looming, Britain – which invented the lithium-ion battery in the 1970s -urgently needs to start building its own supply chain for the biggest revolution in carmaking in 100 years – the switch from the internal combustion engine to electric vehicles.
If the nation’s car industry is to thrive after leaving the European Union, it will need the capacity to build the batteries on which electric vehicles rely. So far, however, relatively little progress has been made while Germany and France are racing ahead, fuelling fears that Britain could be left behind.
Ralf Speth, the boss of the UK’s biggest car company, Jaguar Land Rover, has warned repeatedly that “if batteries go out of the UK, then so will automotive production UK”.
Figures from the Faraday Institution, a battery research centre backed by the government, appear to back him up. They suggest that unless the UK starts investing the billions of pounds needed to build large-scale manufacturing plants for electric vehicle batteries, 114,000 jobs in Britain’s automotive sector could be lost by 2040.
No time for sluggishness
For the Faraday Institution’s chief executive Neil Morris, then, there is a real sense of urgency to get Britain up to speed on batteries as the world’s big carmakers push into electric vehicles.
“We invented the lithium-ion battery, we had a world-leading position. I think it’s fair to say we probably slipped back from that,” he says.
To get a supply chain up and running, the UK will need “gigafactories” – and plenty of them. These are the assembly plants that string together all the different steps required to make batteries.
Britain established Europe’s first battery factory in Sunderland more than ten years ago – a 2GWh facility run by Nissan. But as Morris admits, this “by today’s standards is very small”.
Demand for electric vehicle battery production in the UK is expected to reach 130GWh per year by 2040, equating to roughly eight gigafactories with production capacities of 15 GWh.
Part of the battle to build gigafactories will involve securing investments. According to McKinsey, a successful transition to electric vehicles will require £5bn to £18bn of investment by 2040 into battery manufacturing in the UK.
The report warns that the UK’s ability to attract investment could be undermined by domestic vehicle manufacturers, which are “already negotiating long-term contracts with battery suppliers outside the UK” to secure future battery supplies given the current lack of sufficient battery plants on British soil.
But Morris believes battery manufacturers can find plenty of incentives to locate in the UK. “There are a number of factors that automakers look at when they consider where to put a battery factory and the first one is demand…we have Europe’s fourth biggest car industry and one of its most efficient,” he says.
He also points to some of the more logistical challenges involved in having battery plants and car manufacturing facilities apart. Batteries are heavy, which means they are difficult to move around, and the flammability of lithium-ion batteries means they are potentially hazardous to transport.
But as the March report warns, for car manufacturers producing at volume in the UK such as Nissan, Jaguar Land Rover and Toyota, there is no reason to suppose they “will naturally gravitate towards establishing all, or even any serious proportion, of their European battery manufacturing capacity in the UK”.
With a string of gigafactories still years away, Britain will have to look at other areas of the supply chain to support its car industry. One area of rapidly growing interest is the securing of raw materials that go into lithium-ion batteries.
A start-up in Cornwall thinks it has hit on a way of generating a British supply of lithium. Cornish Lithium wants to extract lithium from hot underwater brines that welled up in the county’s historic mine workings.
If all goes to plan, it will drill below ground, pipe the water to the surface and treat it in a processing plant. Earlier this year it won a grant from the Government through the Faraday Challenge to assess the feasibility of developing a domestic lithium supply.
“The US and the EU are devoting a lot of money toward security of supply. The optimal source of batteries should be on your doorstep. If it’s here, why don’t we look at it?” says Jeremy Wrathall, chief executive of Cornish Lithium.
“It’s the ultimate Brexit-proof project. It plays to the current Government strategy of trying to make sure the UK automotive industry is still relevant.
The role of recycling
Mkango Resources, listed on London’s junior Aim market, is developing a rare earth deposit in Malawi. But closer to home it is exploring the possibility of recycling rare earths in Birmingham. It has invested £300,000 in HyProMag, which is testing technology to extract rare earths from bashed up hard-disk drives and loudspeakers to make new magnets for use in the car industry.
William Dawes, boss of Mkango, says that recycling will become an increasingly important source of rare earth supply alongside mining.
“There are very few primary sources of rare earths being developed outside China,” he explains. “They are not scarce in the ground but the cost of extracting them is actually quite high.” Recycling will not only help meet a forecast surge in demand but will cut out many of the stages involved in the processing of the raw material, he adds.
Allan Walton, a director of HyProMag and a professor in metallurgy at the University of Birmingham, says that post-Brexit, the UK will need to develop its own policy regarding supply of critical materials, having previously followed the EU’s strategy. “We are about to leave the fossil fuel era and move into the electric era. Rare earths are crucial.”
Ideal testing ground
Away from design and material supply issues, there is one area where the UK does have an edge. The UK Battery Industrialisation Centre (UKBIC) in Coventry aims to work together with industry and academia to develop ways of getting ideas out of the lab and into commercial production.
Part of the Faraday Challenge, it’s received £128m under the Government’s industrial strategy to look at the large scale industrialisation of the supply chain for EVs.
Jeff Pratt, managing director, said: “We can test and prove concepts and get them into manufacturing. The idea is that companies come here and prove their ideas work, then get them into manufacturing with their own investment.”
While £128m is just a fraction of the billions being invested in China and Asia into similar technology, UKBIC aims to try to make up this gap, and is a couple of years ahead of anything else in Europe.
“We’re not here to compete with the market, but to grow the market,” adds Mr Pratt.
It’s hard to see how the UK can compete in terms of scale with the Far East, but initiatives such as the Faraday Challenge and UKBIC could drive Britain to create the breakthrough technology needed to improve batteries, or a niche process which could be licensed around the world.
For a company like JLR, which plans to invest £1bn electrifying its fleet, its a very real problem. Although the company has promised to build electric cars at its Castle Bromwich plant, without domestic battery production, how long this will last for is unclear.
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