Two UK startups have announced plans to invest up to £ 4 billion to build the UK’s first large-scale battery manufacturing plant. This could be a major boost for the country’s booming auto industry..

AMTE Power and Britishvolt signed a memorandum of understanding stating that they will work together on construction plans a factory for the production of lithium-ion batteries, a key component in electric vehicles.

Lars Karlstrom, Britishvolt’s chief executive said the companies have ambitions to build capacity to produce batteries up to 30 gigawatt hours (GWh) per year, roughly equivalent to the Tesla-Panasonic Giga Factory in Nevada. A factory of this size would create up to 4,000 jobs, he said..

The global auto industry strives to secure the supply of lithium-ion batteries as manufacturers seek to meet the growing demand for electric vehicles, as well as government regulations that limit carbon dioxide emissions.

However, the lack of large-scale battery production in the UK has sparked fears for the future of the country’s auto industry, including from a Jaguar Land Rover executive. Ralph Speth. Manufacturing batteries near car assembly plants is ultimately attractive to automakers.

The Faraday Institution estimates that the UK will need 130 GWh of annual capacity by 2040 if the country is to maintain its large auto sector..

UK recently lost from massive investment in battery production by Tesla. Elon Musk, The chief executive of the American electric vehicle manufacturer, cited the Brexit uncertainty as the reason for his decision to choose Berlin over the UK location. Other battery manufacturers such as Sweden’s Northvolt, South Korea’s LG Chem and China’s CATL have built factories in EU countries.

Karlström said the Brexit situation provided the company with an opportunity to enter the market, with other companies reluctant to invest in the business despite the anticipated demand for batteries from UK car factories..

Battery plant to be built in UK

European and British car manufacturers typically import batteries from China and South Korea, which are then installed in cars. However, car manufacturers such as Vauxhall owner Peugeot have recognized the growing need to bring battery production closer to Europe..

Securing investment in the British plant was a top priority for government auto industry officials. The state center, with the support of the government, organized a link between the two startups.

AMTE Power, founded in 2013, already operates a small facility in Thurso, northern Scotland, and is looking for sites in Teesside and Dundee for a larger power plant capable of producing 1 GWh per year. AMTE led by CEO Kevin Brundish, focuses on specialized markets such as high-value vehicles.

Britishvolt is making plans for a larger plant with an annual capacity of 10 GWh of batteries intended for mass market vehicles, with the option of adding another 20 GWh after that. Britishvolt expects first £ 1.2bn next year after receiving initial support from Scandinavian and Middle Eastern investors.

The company is confident it can raise funds despite the looming recession of the coronavirus pandemic as investors seek green investment opportunities. Later stages of construction may focus on various technologies such as solid-state batteries as development continues..

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