Faraday Institution publishes 2022 update to its study “UK Electric Vehicle and Battery Production Potential to 2040”

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Growing optimism for the UK battery manufacturing industry but redoubling of efforts needed to keep pace with investments across Europe


HARWELL, UK (23 June 2022) – In an update to its 2020 study, the Faraday Institution predicts that there will be demand for ten UK-based gigafactories (large, high volume battery manufacturing facilities) by 2040, each producing 20 GWh per year of batteries.

The transition to electrified transport is essential to meet Net Zero commitments. The size of the economic opportunity provided by this change is significant. The combined electric vehicle automotive and battery ecosystem could be worth £22 billion by 2030 and £27 billion by 2040. Recent announcements in the UK by Britishvolt and Envision AESC have built excitement, particularly in the North East, about the potential to create a new, dynamic and highly skilled battery industry in the UK.

The UK Government has played its part by making bold policy commitments and increasing investor confidence in the UK as a location to do business.

But more needs to be done.

The UK is making progress but not moving fast enough compared to its European competitors. UK battery manufacturing plants could reach a combined capacity of 57 GWh by 2030, equivalent to around 5% of total European GWh capacity, compared with 34% in Germany.

It is important that UK Government continues to communicate the attractiveness of the UK as a battery manufacturing location to investors. Alongside cultivating new investors, it should also help to develop a resilient, sustainable and efficient supply chain, build up skills capability and commit to the long-term funding of battery research, particularly next generation batteries.

The UK needs to move quickly to secure investment in new gigafactories. By 2030, around 100 GWh of supply will be needed in the UK to satisfy the depend for batteries for private cars, commercial vehicles, heavy goods vehicles, buses, micromobility and grid storage. This demand is equivalent to five gigafactories, with each plant running at a capacity of 20 GWh per annum. By 2040, demand rises to nearly 200 GWh and the equivalent of ten gigafactories.

Download the report, “UK Electric Vehicle and Battery Production Potential to 2040.”

Pam Thomas, Chief Executive Officer, Faraday Institution said: “The UK is well placed to have a leading position in next generation batteries such as solid-state, lithium-sulfur and sodium-ion technologies. The UK is already home to global experts in battery research and to well-established companies. We must move quickly to exploit this competitive advantage by establishing large-scale domestic manufacturing in the UK while continuing to fund long-term battery research”

Stephen Gifford, Chief Economist, Faraday Institution said: “There is a growing sense of optimism that a highly productive and sustainable battery manufacturing industry can be built in the UK. By 2040, a successful industry could employ 170,000 people in EV manufacturing, 35,000 people in gigafactories and 65,000 people in the battery supply chain.”

Matt Howard, Chief Strategy Officer, Faraday Institution said: “The move to electrify transport and toward large-scale battery production represents a massive shift in industrial skills. The UK’s engineering and manufacturing workforce can gain a competitive edge over other countries through the provision of a national training curriculum that will ensure the right skills are delivered at the right time.”

Continued efforts needed

The UK Government, industry stakeholders and research organisations should celebrate the recent successes but keep up the pace and focus. The shake-up and unprecedented change in the global automotive industry will create winners and losers. The UK needs to grab the opportunity with concerted and coordinated effort by:

Summary of changes in key outputs of the report

Key changes in assumptions and modelling in the Faraday Institution’s 2022 report relative to the 2020 study are:

The result of these key changes for the 2022 report relative to the 2020 study are:

Download map and figures.

For more information on the Faraday Institution, visit www.faraday.ac.uk and follow @FaradayInst on Twitter and LinkedIn.

Posted on June 23, 2022