The hunt is on for a suitable location for a UK Tesla Gigafactory

With the car industry limping back into life after an unprecedented shutdown due to coronavirus there is renewed focus on the need for a gigafactory-style facility here in the UK. In the latest development, it would seem that Tesla itself has cast its eyes back to these shores and is actively seeking a suitable location for a new facility.

It has only been a week since we reported on two UK-based start-up businesses with lofty ambitions to build 30GWh-worth of battery production. AMTE Power and Britishvolt are looking to raise £1.2bn in total to deliver their plans and finally get the ball rolling on a domestic battery production line – something that is critical to the future of the UK's EV industry.

Whilst we obviously applaud AMTE Power and Britishvolt's ambition, only one company (AMTE) actually produces batteries at the moment. Britishvolt was only formed in 2019 with the singular goal of fronting a gigafactory project. It made us dubious of the pair's ability to deliver on their goals.

The UK needs huge investment from companies that have a proven track record in battery production and now it appears that the big daddy of the EV world could be heading here. Property Week has broken the news that the government is on the hunt for a 4 million square foot space for Tesla to construct a gigafactory.

According to the piece, the Department for International Trade (DIT) is looking for sites where an EV research, development and manufacturing plant could be placed for Tesla. In the running, or at least hoping to get Musk's business, is the Gravity Industrial Estate near Bridgewater in Somerset – a business park that is being dedicated to energy-related employment.

At 650 acres, Gravity is much bigger than Tesla's facilities in China (214 acres) and Fremont, California (370 acres). It'd be slightly smaller than the 740 acres being devoted to Gigafactory Europe near Berlin.

The DIT was positively vague when asked for comment by Property Week, telling them: “The government is working with industry to help make the UK the location of choice to develop world-class electric vehicle technologies. DIT is working closely with partners to scope out sites for new investment into EV research, development and manufacturing across the UK.”

Vitally important

We've spoken at length in previous articles about why having a domestic gigafactory is so important for the UK to secure EV manufacturing here prior to the end of sales of new petrol and diesel cars in 2035. It was a huge blow late last year when Tesla announced that it was heading for Germany, with Musk stating, “Brexit made it too risky to put a gigafactory in the UK”.

Gigafactory Europe could be worth up to $5.5bn and will attract a huge amount of skilled labour and many highly valuable jobs to Germany. And that's money and work that prior to the announcement in November could well have headed here. Elon Musk had long spoken about the UK being a preferred location for a manufacturing facility.

News that the DIT is scouting for a UK location for Tesla is both unexpected and welcome. Moreover, it's vitally important given the latest news that the Nissan plant in Sunderland is under threat if the UK leaves the EU with no deal. The Japanese brand is essentially pleading with UK and EU negotiators to come to an arrangement to avoid the 10 per cent tariff on cars if the UK exits the Union on WTO terms. Given that 70 per cent of cars built at Sunderland are sold in the EU, it's a hit that Nissan simply isn't willing to take.

Inward investment from Tesla would go a long way towards offsetting inevitable losses that will be incurred thanks to Brexit. What's more, Tesla's leading position in EV research, development and manufacturing is effectively future-proof, meaning it's a long-term money maker.

Something to consider is that Tesla recently applied to become an energy supplier in the UK. We said this was most likely to ensure that any infrastructure it does build can sell energy back to the grid. Considered in the context of a new Gigafactory and Tesla might just be closer to opening up shop here than we think.

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