Source · Select Committees · Business and Trade Committee
Recommendation 3
3
Accepted
Paragraph: 23
Set out plan to attract established and new battery gigafactory manufacturers to UK
Conclusion
Encouraging a competitive mix of battery manufacturers to locate in the UK will help to build the supply chain while capturing intellectual property from new technologies. The Advanced Manufacturing Plan and UK Battery Strategy must set out how the Government plans to attract established battery manufacturers as well as new entrants to the battery market to build gigafactories in the UK. Those plans could include a twin-track process for access to financial support to reflect the differences between firms at different stages of development.
Government Response Summary
The government highlighted existing support for both emerging and established battery manufacturers and committed to working with public finance institutions and establishing an industry forum with a Call for Evidence to identify market failures and unlock additional investment for advanced manufacturing.
Paragraph Reference:
23
Government Response
Accepted
HM Government
Accepted
A) The Department for Business and Trade provides support to both emerging and established battery manufacturers. The UK is one of the most attractive destinations in the world for inward investment and businesses are already investing significantly into battery manufacturing. With support from the Department for Business and Trade, AESC Group is building its second gigafactory in Sunderland and Tata-Agratas announced a £4 billion investment to build one of Europe’s largest gigafactories. These projects will jointly create over 5,000 jobs and increase future UK annual production capacity to an estimated 52GWh by 2026, over halfway to meeting 2030 demand. B) The Department for Business and Trade also supports battery manufacturers at earlier stages of development through the Advanced Propulsion Centre (APC). Formed in 2013, it has seen approximately £1.5 billion of joint industry and Government funding to help the automotive industry meet the challenges of decarbonisation, including through the industrialisation of new battery technologies. For example, in October, APC announced the successful applicants of its latest funding rounds worth £86.9 million, including the SiSTEM project by Ilka Technologies and MPAC. Through a partnership with the UK Battery Industrialisation Centre (UKBIC), they will manufacture Ilika electrodes and establish an assembly line capable of producing 1.5 megawatt hours of Goliath batteries annually.4 This marks a crucial step toward transitioning from lab-scale development to full-scale industrial production in the UK. C) Auto2030 will build on the works of both the ATF and the APC R&D programmes, ensuring continuity in Government support to 2030. This comprehensive package of interventions includes: R&D Innovation grants, to develop strategically important zero emission vehicle technologies, boosting the UK’s long-term competitiveness; Scale-Up grants, to fast-track the development of near-commercial pilots for zero emission vehicle technologies, de-risking future capital investment; and Capital transformation grants, to unlock investments in an internationally competitive zero emission vehicle supply chain, anchoring UK manufacturing. D) We are investing record sums in battery R&D through the Faraday Battery Challenge to establish the UK as a battery science superpower. It supports world-class scientific technology development and manufacturing scale-up capability for batteries in the UK. Under the Faraday Battery Challenge, the Government is supporting a UK Battery Industrialisation Centre (UKBIC) which provides the missing link between battery technology which has proved promising at laboratory or prototype scale, and its successful mass production. In November we announced the investment of an additional £38 million to enhance the UKBIC development facilities, boosting its capability for research and development in new chemistries and future technologies. This builds on our know-how in lithium-ion solutions and enables the scale-up of emerging innovations. Recent announcements brought the overall budget of the Faraday Battery Challenge to £610 million since 2017. E) Further Government-backed finance options are available. We are working with Public Finance Institutions, including the UK Infrastructure Bank (UKIB) and UK Export Finance (UKEF), and engaging businesses and investors, we will seek to better understand these approaches and help ensure public investment crowds in private finance. As committed in the Advanced Manufacturing Plan, we will establish an industry forum, supported by a Call for Evidence, on access to finance for manufacturers to identify the market failures, constraints, and barriers that the sector is facing to unlock additional investment for advanced manufacturing.