UK government gives 100 mn backing to car battery factory

The UK government will invest 100 million in Britishvolt as a car battery manufacturing startup tries to build Britain's first large-scale gigafactory in the north-east of England.

The government s Automotive Transformation Fund will invest alongside asset management company Abrdn and its majority-owned property investment arm, Tritax, to fund the sale and leaseback deal for the huge building that will house the electric car battery factory near Blyth in Northumberland.

Peter Rolton, Britishvolt's executive chairman, said that the UK automotive industry needs a local source of batteries. There will be very significant shortfalls of batteries. We are absolutely vital to the UK industry and support those jobs. Britishvolt is one of two major UK battery manufacturing projects that have secured funding, along with an expansion of an existing plant in Sunderland owned by China s Envision that supplies to Nissan.

The aim is to build a plant quickly with the aim of providing a large part of the UK car industry's needs as it transitions from internal combustion engines to electric cars that produce zero emissions. The sportscar maker Lotus has signed a memorandum of understanding, and it is in talks with several potential clients, according to Bloomberg on Thursday.

The plant is expected to employ about 3,000 workers when it is full capacity in around 2028. The government and Britishvolt didn't say anything about the size of the government investment, citing commercial confidentiality. A source with knowledge of the negotiations said it was worth about 100 m.

If the UK is to retain a car industry of a similar size, the Advanced Propulsion Centre calculates that it will need to produce batteries with a capacity of 90 gigawatt hours GWh a year. The Britishvolt hopes to produce 30 GWh, but the current UK production capacity is less than 2 GWh.

Two more potential battery manufacturing sites are being marketed by local authorities in the West Midlands and Somerset. The West Midlands site at Coventry Airport was granted pre-emptive planning permission last week.

Rolton said that the company was working on the timing of a planned stock market listing, which will raise the money to build the production line. The full project is expected to cost 3.8 billion but the government backing has already helped in conversations with potential investors. Britishvolt has previously won backing from Glencore, the FTSE 100 miner, and preparatory construction work on the 93 hectare site has begun.

Securing investment in UK-based battery manufacturing has been an important goal for the government. Boris Johnson, the prime minister, has referred to his hopes for the project as part of his plan to level up parts of the country that have missed out on investment in recent decades.

The Wansbeck constituency was narrowly retained by Labour in the 2019 general election. It is next door to Blyth Valley, a seat formerly part of Labour's red wall that voted in a Conservative MP for the first time in that election.

Johnson said the plan is a strong testament to the skilled workers of the North East and the UK's place at the forefront of the global green industrial revolution. Rolton said Britishvolt had taken part in a jobs fair in the area which caused queues round the block while some parents even took children out of school to attend. That is what it means for the area, he said.