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British start-ups seek to raise £1.4bn for the country's first gigafactory

If the UK is to remain competitive in automotive manufacturing it will need a gigafactory – soon. To secure the long-term future of 114,000 jobs in the industry we will need 130GWh of battery production capacity by 2040, according to the Faraday Institute. Two British start-ups, AMTE Power and Britishvolt, have now joined forces to lay the groundwork for such a project.

The two companies signed a memorandum of understanding (MoU) that lays out how they plan to move forward with a lithium-ion battery factory with 30GWh capacity, which they are calling the GigaPlant. Alongside the plant itself, they plan to build a UK-based supply chain which will handle the raw materials required, and a distribution network of clients including automotive and energy storage.

AMTE Power was founded in Thurso, Scotland in 2013, and produces batteries for specialist car makers thanks to a team of 50. Britishvolt is even newer still, having been founded in December last year with the specific mission of establishing giga-scale production in the UK. Despite both companies' youth, they have already managed to raise over £10m via investment from the Middle East and Scandinavia.

Thanks to AMTE Power's existing client base and manufacturing operations it is already in a position to scale-up its capacity and, through the newly-formed group, hopes to raise £200m to build a new plant capable of 1GWh. This would allow AMTE to supply larger car manufacturers, as well as its existing specialist client base.

But the plans don't stop there. Where Britishvolt is concerned, the plan is to raise £1.2bn over the next 12 months in order to facilitate a much larger plant with a capacity of 10GWh, followed by an additional 20GWh once the first phase has proven itself viable. CEO of Britishvolt, Lars Carlstrőm, reckons that the project is good for 4000-plus jobs, as well as significant environmental benefits compared to importing battery cells from the Far East.

With the exception of Nissan, which builds batteries for the LEAF at its Sunderland plant (albeit this arm of the business has been sold to a Chinese firm), UK-based car makers import EV battery cells with all the associated environmental costs. Given car manufacturers are increasingly realising that the 'cost' in carbon of production is a huge issue, they are rapidly reducing their carbon impact. A so-called GigaPlant would make that possible in Britain.

Lars Carlstrőm said: “Meeting Road to Zero targets and moving the UK into a low carbon economy will necessitate the unprecedented electrification of vehicles, and reliance on renewable energy will require extensive battery storage. It is costly and carbon-intensive to have lithium ion batteries imported from the Far East, and this GigaPlant would cement a solid onshore supply chain to ensure quality and eliminate future uncertainty of supply."

The need for a UK-based gigafactory

First there was Brexit, and now there is the Coronavirus which has clobbered car manufacturing and sales globally. Making and selling cars is not an easy business and in order to create efficient, cost-effective supply chains, big-name car brands need to locate their manufacturing facilities in the best possible locations.

Where previously the UK was seen favourably as a manufacturing base to non-European manufacturers, Brexit has more-or-less nobbled that one. A continuing 'brain-drain' in this country (where people emigrate to other countries to take up skilled work), especially in the engineering sector, is also a significant issue, costing the economy billions each year. Furthermore, when it comes to EVs, the world's biggest player – Tesla – has already voted with its feet and its wallet by starting work on Gigafactory Europe in Germany.

All of this together is slowly pulling the rug out from under our domestic car makers' feet. Even with significant government investment, such as the £108m Battery Industrialisation Centre near Coventry, and the Advanced Propulsion Centre where AMTE and Britishvolt were first introduced, the UK is lagging behind its continental rivals. A further £1bn has been promised for the electric car industry here but quite where this will be spent is still anyone's guess.

If AMTE Power and Britishvolt's GigaPlant project gets funding and can be turned into a reality to the full extent of the plans, a quarter of the country's battery manufacturing capacity requirement by 2040 will have been fulfilled. This domestic capability will enable manufacturers like JLR (which is itself investing big in EV infrastructure), MINI, Toyota, Nissan and all of the smaller, more specialist car builders to reduce costs and secure jobs.

Crucially, it keeps the UK competitive on a global playing field which is rapidly turning away from traditionally-powered cars towards EVs.

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