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Where does the UK’s EV battery manufacturing strategy go from here?

19 January 2023

By Ian Silvera

The demise of BritishVolt has reportedly seen hundreds of workers put into redundancy, investors out of pocket and, no doubt, suppliers asking questions. The administration comes after months of speculation surrounding the future of the Northumberland-based project in the media.

Though the financial fall of any business is always bad news, BritishVolt’s collapse comes with substantial political strings attached, triggering a pre-General Election headache for Rishi Sunak heading into 2024.

Boris Johnson’s administration gave the initiative flagship status by promoting BritishVolt at the heart of its Levelling Up strategy, which itself endorsed public and private investment in infrastructure projects around the so-called ‘Red Wall’ of Conservative seats in the Midlands and the North of England secured at the 2019 General Election.

With a series of Tory MPs across Blythe and wider Northumberland with wafer thin majorities, BritishVolt was politically attractive. “This project will support 3,000 direct jobs, and a further 5,000 in its supply chain,” the government claimed.

Technically, too, the project had some fundamental advantages: the site had a deep-water port, access to green energy and links. It ticked many boxes for a viable gigafactory and was backed by Glencore, the mining giant that could have unlocked a wider ecosystem for BritishVolt, including battery recycling.

Despite a reported £1.7bn in private funding, alongside the government’s own investment, the project failed to get off the ground. Yet the energy transition is continuing at pace, with The National Grid predicting that 90% of new cars in Britain would be expected to be electric by 2050. That will follow a ban on the sale of new petrol and diesel cars in the UK come 2023.

BritishVolt had intended to manufacture power cells for 300,000 electric vehicle (EV) battery packs a year. Will British-based original equipment manufacturers (OEMs) now have to source these batteries from abroad? So far, Chinese-owned Envision AESC is the standalone gigafactory for the UK.

Based in Sunderland, with 38 gigawatt hours (GWh) of annual output to supply Japanese carmaker Nissan. In the West Midlands, another former ‘Red Wall’ target, regional mayor Andy Street is championing a gigafactory project for Coventry. However, the initiative is in its very early stages.

There may also be some hope yet for the BritishVolt site. Reports have emerged of interested investors circling its assets. “Businesses including FTSE 100 miner Glencore and Jaguar Land Rover owner Tata Motors have expressed interest in the site, according to people with knowledge of the discussions, as well as several other carmakers and wind turbine makers,” the FT has said, whilst at the same time noting that Glencore has played down purchasing the site.

Either way, this particular episode in the UK’s industrial history has left egg on the face of the Conservatives, and no doubt Chancellor Jeremy Hunt will want to rectify the situation in some way come his Spring Budget in March and create pause for thought, namely raising the question: should the UK aim to manufacturer EV batteries and why? The business world, meanwhile, looks to remain pragmatic and the people of Blyth could yet be granted their thousands of jobs.