UK battery plan light on funding and manufacturing focus

Commitments to production projects take a back seat to cash for R&D

UK battery plan light on funding and manufacturing focus
Unusually, the government paper was released on a Sunday

The UK government has announced its first ever EV battery supply chain strategy as part of its advanced manufacturing plan. However, the plan prioritises backing the country’s research and development (R&D) resources over commercial production projects, meaning little clarity over future funding support for material investors.

“The UK’s battery strategy will seek to invest £50mn in developing the UK’s battery world-class capabilities, emphasising the importance of developing the batteries of the future by leveraging the UK’s world-leading research and innovation, securing a resilient UK manufacturing supply chain,” the government says.

The UK will need over 100GWh/yr in battery production capacity by 2030 to power its expected fleet of private cars and LCVs, according to the UK research institute the Advanced Propulsion Centre. To help to try to meet this mark, the specific commitments for the £50mn investment in the plan are:

  • enhancing the UK Battery Industrialisation Centre (UKBIC) development facilities to boost its research and development capabilities in new chemistries.
  • funding further research into LFP chemistry.
  • investing in an Advanced Materials Battery Industrialisation Centre, a new battery materials scale-up facility in England’s West Midlands and Northeast regions to bridge the gap between laboratory research and commercial production.
“Growing the battery industry is vital to positioning the UK as the best location in the world to manufacture electric vehicles,” UK industry minister Nusrat Ghani says.

But the level of investment announced in the plan — a headline commitment of £50mn, compared to the £4.5bn total manufacturing investment package announced last week — hardly measures up to an all-in commitment to making the UK a premier location for battery production.

“Last year, the US government announced a $2.9bn offer of grants and loans to shore up the US’ battery supply chain for EVs, and has recently topped that up with another $3.2bn. £68mn (US$86mn) is a drop in the proverbial ocean,” says Kevin Mak, principal automotive market analyst at analyst Tech Insights.

“I would say the UK will still be a battery and electrification R&D hub, but for manufacturing and supply, it would be challenging, to say the least,” Mak warns.

“There is not a great deal of money being offered — around £68mn for battery-related projects — and a good slab of that going to expand the UKBIC in Coventry,” says journalist and automotive consultant Quentin Willson.

The UKBIC is a £130mn national battery manufacturing scale-up facility which provides skills for the battery sector, which is set to receive a further £38mn in funding under the battery plan. It says that its “new funding […] is principally for UKBIC’s innovative flexible scale-up line, and builds upon the £36mn already committed by Faraday Battery Challenge in May”, adding that “preparatory work on construction of the facility is already underway”.


“Announcing the UK's battery strategy on a Sunday seems a little odd. But I am told this document was slated to come out last week and needed to be launched before this week's meetings with global investors,” Willson says.

And, in Willson’s view, the UK’s recent decision to push back its ban of new ICE vehicles sales to 2035 — if the UK is trying to attract OEMs and battery supply chain investors into the country — just adds to the sense of government disarray.

“Reading this [battery strategy] document in context with that act seems insane now. Why would you want to reduce EV demand, slow investment, spook investors and annoy an already heavily invested car industry?” he asks.

But he acknowledges that it is at least trying. “This government and the Department for Business & Trade have definitely got the message: Europe, the US and China are forging ahead on EVs and electrification and we need to stay in the game or lose our car industry,” Willson says.

If investment into further gigafactories or battery material processing can be secured, the government’s plan suggests a desire to build out an export industry. “There is also a large export potential. Currently, 78pc of UK finished vehicle production is exported,” the government document says.

Any deals to attract investment from OEMs to manufacture components or vehicles in the UK would likely follow the mould of this year’s agreements with India’s Tata Motors and Japan’s Nissan. In both cases, the government is reported to be paying the firm’s substantial amounts in subsidies to support UK EV manufacturing. The government, however, has not commented on any subsidy payments to the automakers.

The wider automotive industry is set to receive up to £2bn from the advanced manufacturing plan, but the specific allocation of this funding has not been announced.

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