Parliamentary committee warns UK must attract EV battery supply chain investment

Fri 24 November 2023 View all news

The Parliamentary Business & Trade Committee says that the UK is falling behind international competition and needs to urgently create an attractive environment for electric vehicle (EV) battery production in the UK.

The Committee's Batteries for Electric Vehicles report warns that the UK faces a huge ‘gigafactory gap’, with less battery production capacity than needed for the nation’s future needs. If not addressed, this could see automotive production in the UK decline, potentially putting hundreds of thousands of associated jobs at risk.

The report is published in the same month as Nissan announced plans for a new battery gigafactory in North-East England and just before the Government published a new battery strategy for the UK, addressing some of the Committee's concerns.

By harnessing the UK’s low carbon energy sources, the Committee's report argues that the Government could become an important centre for ‘midstream’ refining processes for critical materials such as lithium. Doing so would establish the UK as a frontrunner in building sustainable and ethical batteries, compared with those from China and European countries.

The report comments on China’s current dominance over large parts of the battery supply chain leaving battery makers exposed should the country choose to restrict exports of battery materials and components. Currently, China accounts for 78% of the world’s cathode production.

The Committee also called for stronger Government backing for agreements to set up new gigafactories, prioritising them for infrastructure improvements, and boosting support for domestic critical mineral mining.

Committee Chair Liam Byrne said: “Power was at the heart of the industrial revolution and it will be at the heart of the green industrial revolution. But right now, the UK is on course to secure barely half of the electric battery capacity needed by the domestic car industry alone. Unless we fix this fast, we risk the industry simply relocating to Europe or the US, or becoming reliant on imports from China and elsewhere. That imperils 160,000 jobs and a jewel in the UK’s industrial crown. Now is the time to act.

"We are unlikely to be able to compete with Brussels, Bideonomics or Bejing when it comes to subsidies. But we can still take decisive action. We desperately need a 10-year strategy that boosts subsidies, creates secure access to low-cost power, designates key sites for gigafactories, fixes the skills gap, delivers tariff-free trade, de-risks access to critical minerals and offers long-term R&D for the industry.

"Our competitors have hit the accelerator on battery investment, and we’ve been left in their wake. The next round of investments by car makers in their factories will be decided by local battery manufacturing capacity. Boosting support for gigafactories is not enough; Government must cultivate a more appealing investment environment for battery producers before it’s too late. We must act urgently if we are to safeguard British automotive jobs and secure this critical industry for the future.”

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