Insight: Breaking the gigafactory impasse

Despite a prolonged period of promise, rumour, and anticipation, there is today in 2022, but a single operational at-scale gigafactory in the UK. Dean Barnes from ATS looks at why a strategy to develop a thriving EV manufacturing sector is so important.

With projections suggesting that UK battery manufacturing capacity requirements will exceed 80GWh per annum by 2030, the circa 2GWh annual output from the Envision/Nissan plant at Sunderland is a vivid illustration of just how far there is to go.

The UK automotive manufacturing sector currently employs over 150,000 people and contributes over £15 billion annually to the national economy. Unless the necessary investment and commitment is in place soon, and a clear government strategy is established to secure the necessary battery capacity within the required timeframes, well over half of these jobs (as many as 90,000 according to some reports) will be at risk as manufacturers flee the UK to fulfil their battery capacity requirements elsewhere. European (ex-UK) gigafactory capacity currently exceeds 75GWh p.a. and is most recently projected to be as much as 800GWh p.a. by 2030.

To deliver gigafactories in time, the government, in conjunction with private equity, need to break the impasse by making a firm and immediate funding commitment / Picture: Getty/iStock

In these increasingly difficult economic times, the UK government faces tough choices and uppermost in their thinking must be breaking the gigafactory impasse. Without a clear commitment and strategy coupled with government financial backing, there may be no long-term future for UK EV manufacturing due to the lack of available local battery production.

Manufacturers will not commit to local gigafactories until they have absolute confidence that these factories will be built and will provide the necessary battery capacity in time. Without backing from large automotive OEMs, the factories, due to a lack of investment, will not be built…unless the government, in conjunction with private equity, break the impasse by making a firm and immediate funding commitment (as much as £100 billion may be necessary) to deliver these ‘critical to survival’ gigafactories in time. By so doing, a thriving EV manufacturing sector could then create as many as 30,000 additional jobs by 2030.