Last year 37,850 electric cars were sold in the UK – up from 15,510 in 2018. This trend has continued into 2020, not least with Uber striking an agreement with Nissan’s Sunderland factory to buy 2,000 Leaf cars for its London drivers.
The result is that electric vehicle manufacturers need to step up production of “giga batteries” to power these cars and this requirement is itself leading to the rise of giant battery production plants known as Gigafactories.
The first battery giga plant moved a step closer this summer as manufacturer Britishvolt and the Welsh Government signed a landmark memorandum of understanding for a new 2.5 million square foot site at the former RAF base at Bro Tathan in South Wales. Tesla has also confirmed that it is liaising with the government to help source a new Gigafactory on a potential site in Somerset.
The Faraday Institute estimates that domestic demand for electric vehicles will be sufficient to support eight large battery plants across the UK by 2040, but how realistic is this scale of development?
The UK Government has recently announced up to £1 billion of funding into the sector and a spokesman from the Department of Business Energy and Industrial Strategy said “the Government is committed to meeting the need for fast-paced development of battery technology and to securing a Gigafactory in the UK”.
However, commentaries state that Gigafactories will need to be constructed close to the car manufacturers to be as close as possible to their supply chains and labour. Although the UK is currently the fourth largest vehicle producer in Europe, a whopping 81% of all vehicles made in Britain are exported stretching the viability of the local market. Also, how will Brexit affect the future of manufacturing on our shores? Could the ongoing delays in reaching any level of certainty as how our trading relationship will work lead to the UK missing the boat?
Commercial agents remain cynical on how many Gigafactories will end up being built in the UK, a small land mass with a large population, where there are no doubt better locations globally. Why build Gigafactories in places that may end up exporting the majority of its product?
Also, do we really have the available space for such developments? Space is hard to come by for a number of reasons. The industrial and logistics sector in the UK has seen record growth over the last few years with both new as well as existing businesses acquiring industrial units. The rate of take up of new space has been dramatically accelerated over the last few months due to Covid-19 and the unprecedented increase in online shopping and the increased digitalisation of business platforms in many sectors. Units are being snapped up not only by retailers but by many other businesses such as bakers, yoga businesses and catering companies.
Colliers International commented at a recent Industrial and Logistics Webinar that there was widespread concern about the lack of available industrial sites in the UK to fulfil the existing need, let alone space large enough to meet the requirement of a Gigafactory and this is not helped by a cumbersome planning system which seems focussed on the provision of new homes.
The Faraday Institute warned that without further research development and funding opportunities for the UK, Gigafactories may drift towards Europe as our European neighbours are also keen to attract Gigafactory operators due to the economic benefits they offer. Sweden, Germany and Poland have similar aspirations with the largest European Gigafactory set to be built in Sweden.
Although the UK has an established diesel and petrol car manufacturing industry, the size of the country’s electric vehicle manufacturing sector is modest in comparison and with lots of European countries similarly forecasting significant Gigafactory growth, and this leads to the question is there really a demand for the volume?
However, there is history of the UK Government intervening to support the UK car industry and it must act quickly to sort our trading platform with Europe and work to encourage new operators onto our shores, to build upon the Welsh success story and help pave the way for Tesla and others to establish new enterprises this side of the Channel.
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