The UK government will invest £100million in Britishvolt as the car battery manufacturing startup seeks to build Britain’s first large-scale ‘gigafactory’ in the northeast of England.
The government’s Automotive Transformation Fund will invest alongside asset management firm Abrn and its majority property investment subsidiary, Tritax, to fund a sale-leaseback deal for the huge building that will house the car factory. electric car batteries, near Blyth in Northumberland.
Peter Rolton, Executive Chairman of Britishvolt, said: “The UK automotive industry needs a local source of batteries. Chinese or Asian imports will not be an option. There will be very, very significant shortages of batteries. We are absolutely essential to maintaining British industry and supporting these jobs.
Britishvolt is one of two major battery manufacturing projects in the UK that have secured funding, alongside the expansion of an existing factory in Sunderland owned by China’s Envision which supplies Nissan.
The company hopes to quickly build the plant in a bid to meet much of the needs of the UK car industry as it transitions from internal combustion engines to electric cars that produce zero exhaust emissions. It is in talks with several potential customers and sports car maker Lotus has signed a memorandum of understanding, Bloomberg reported Thursday.
The plant will employ around 3,000 workers when it reaches full capacity around 2028. The first batteries are expected to start production in 2024 to take advantage of growing demand ahead of the UK’s ban on new battery-free cars in 2030.
The government and Britishvolt declined to detail the size of the government investment, citing commercial confidentiality. However, a source with knowledge of the negotiations said he was worth around £100million.
The government-funded Advanced Propulsion Center calculates that the UK will need to produce batteries with a capacity of 90 gigawatt hours (GWh) per year if it is to maintain a similarly sized car industry. Current generation capacity in the UK is less than 2 GWh, but Britishvolt hopes to produce 30 GWh.
Local authorities in the West Midlands and Somerset are trying to attract investors to two other potential battery manufacturing sites. The West Midlands site at Coventry Airport was granted precautionary planning permission last week.
Rolton said: “The company was still working on the timing of a planned IPO which will raise funds to build the production line. The full project is expected to cost £3.8billion, but government backing has already helped in conversations with potential investors.
Britishvolt has already secured backing from FTSE 100 miner Glencore 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. Prime Minister Boris Johnson has repeatedly raised his hopes for the project as part of his plans to “level up” parts of the country that have lacked investment in recent decades.
The plant will be based in the constituency of Wansbeck, narrowly retained by Labor in the 2019 general election. It is next to Blyth Valley, a seat that was once part of Labour’s ‘red wall’, which voted for a Conservative MP for the first time in this election.
Johnson said the plan “is a strong testament to the skilled workers of the North East and the UK’s place at the helm of the global green industrial revolution”. He added that the plant “will boost production of electric vehicles in the UK”.
Rolton said Britishvolt attended a job fair in the area which caused “queues around the block”, while some parents even pulled their children out of school to attend. “That’s what it means for the region,” he said.