Eve Energy gigafactory plans highlight UK battery shortfall

Chinese firm is set to invest over £1bn in UK battery facility

Eve Energy gigafactory plans highlight UK battery shortfall
Eve Energy is reported to be eyeing a gigafactory in the UK

Chinese battery materials manufacturer Eve Energy is reportedly in talks to build a battery gigafactory near the UK city of Coventry, a move which would make it the latest overseas firm to invest in battery production in the UK.

EV industry commentators have welcomed the news, but some have argued that another investment from a non-UK firm highlights the lack of an integrated plan for a self-sufficient UK battery supply chain.

"It is notable that it is once again an overseas company, adding to investments by India’s Tata group who own Agratas and China’s Envision group who own AESC," says James Frith, head of European operations at battery technology investment firm Volta Energy.

Eve's potential investment in the Coventry gigafactory would follow a £4bn Somerset gigafactory built by Indian OEM Tata Motors, owner of British brand Jaguar Land Rover (JLR).

Chinese battery firm Envision AESC also currently operates a small 1.9GWh battery plant on behalf of Japanese OEM Nissan in Sunderland, and is building a second with a capacity of 12GWh, due online in 2025.

"The government must now support the growing UK battery start-up ecosystem, to make sure that, while foreign companies are building capacity, it is UK technology that is used in the batteries these facilities will produce,” Frith adds.

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

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. This is compared to a 38GWh estimated annual capacity upon the completion of Nissan's third production line in Sunderland.

“The UK is already late to the game. To avoid being a busted flush we need an integrated strategy from precursor materials through to recycling and repurposing," notes Jonathan Carrier, CEO and co-founder of energy storage firm Allye.

"We need to do better with our own resources and enable a strong battery ecosystem, not just a gigafactory in isolation,” he adds.

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By 2027, EU rules of origin will see tariffs applied to EVs imported into the UK and EU unless at least 55pc of the value of an EV needs is from those regions.

At present, the UK still faces a battery capacity shortfall so acute that last year the country's OEM lobby argued in favour of a postponement of the beginning of a rules of origin requirement from the originally planned 2024 date to the current date of 2027.

"Domestic-built batteries will help ensure the 2027 EU rules of origin...do not result in tariffs that would make our EV exports uncompetitive," says Quentin Wilson, founder of EV campaign group Faircharge.

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