Will Britishvolt hand over EV battery production to the US?

The recent update on Britishvolt’s collapse into administration leaves questions around government and commercial support for EV battery manufacturing

Due to unfortunate circumstances the Britishvolt gigafactory development will be wrapped up. This is a result of the company going into administration, which is something that we take no pleasure in sharing.

Not only has the Britishvolt development been heralded as a great opportunity to accelerate electrification, but also a potential enabler of jobs in the UK. It’s safe to say that the UK Government will be conscious of the need to reassess future plans to increase employment. 

In order to reach electrification targets by 2030, the UK is said to demand five gigafactories by then, and the closure of its first has received a lot of concern from the press. But the story has been going around for the past few months. 

As the push for EV battery production continues, what are the potential routes for Britishvolt in the race to electrification?

Why does the UK need gigafactories?

A June 2022 report by the Faraday Institution, UK Gigafactory Outlook puts this into perspective in terms of production. The annual gigafactory study shows predicted growth trends, which expects to see the demand of UK-produced batteries increase 10-fold by 2040—with the number doubling from 2030’s predicted numbers. 

According to the survey’s focus on vehicle manufacturing, the numbers are expected to rise at a similar rate over the next 10 years with the UK producing 1.6 million EVs by 2030. But, with the current figure higher than predicted already—reaching around 660,000 EVs—the question stands as to whether there will be enough batteries at hand to build them. 

Is the US interested in further battery production?

In mid-2022, Britishvolt recognised the importance of Tesla in the expansion of battery manufacturing, which the company’s Chief Communications Officer, Ben Kilbey welcomed the idea of Tesla coming to the UK. 

As Elon Musk looks to fulfil the company’s plans to ramp up EV output across the globe, the potential for battery manufacturing plants could be fulfilled by the pure-play manufacturer. Musk was previously put off the idea of opening a gigafactory in the UK due to Brexit, but perhaps this disruption to the UK’s plans may bring it to Tesla’s attention. 

After all, the US battery sector has seen increasing interest from various firms, including KORE Power (which purchased 214 acres for a gigafactory in Arizona), Samsung’s collaboration with Stellantis in Indiana, and even some interested parties from Asia. Needless to say, the country is on the map as an area for battery-industry expansion. 

With US$73bn invested in battery plants across the US, will companies based there focus solely on localising their manufacturing efforts or is there room to give the UK the electrification components that it needs? 

Battery recycling and manufacturing would go hand-in-hand

The demand for batteries in the UK is an opportunity presented to firms that hold the financial capacity to take it on. Perhaps the convergence of battery recycling and manufacturing could save the industry as there is potential for an organisation like Glencore, which is already invested heavily in the firm Li-Cycle with US$200mn to expand battery recycling efforts. 

While it makes sense for a firm like Glencore to be intrigued by the idea, the UK may not have a strong enough mining presence to require a localised link to battery manufacturing. 

A positive outlook for the gigafactory

The UK Government remains optimistic for the future of the gigafactory despite the fact it may be managed by another company. Authorities will play a major role in sourcing new ownership of the factory and sourcing potential investment for the project, as the ability to produce EVs in the country hinges on its ability to produce its own batteries. 

With the onus on automotive and energy firms to undergo similar developments of their own, perhaps a part-filled canvas may attract interest from some of the carmakers as they look to provide components for their future operations.

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