News
02/05/25
UK warned of looming battery shortfall as demand surges
UK warned of looming battery shortfall as demand surges
London, 2 May (Argus) — The UK will face a 55GWh shortfall in battery supply by
2035 unless urgent action is taken to scale up domestic manufacturing and reduce
reliance on imports, according to a new report from the UK Research and
Innovation's (UKRI's) Faraday Battery Challenge. The report, commissioned by the
Faraday Battery Challenge and delivered by Innovate UK, forecasts national
battery demand to exceed 165 GWh/yr by 2035, rising to nearly 200GWh by 2040.
More than 90pc of this demand is expected to come from the automotive sector,
with additional pressure from aerospace, rail, marine and energy storage
systems. The report identifies the UK's strategic need to establish
gigafactories capable of producing high-performance and cost-optimised cells,
including cheaper alternatives to nickel manganese cobalt batteries such as
lithium iron phosphate and lithium manganese iron phosphate, which are dominated
by Chinese producers. While the UK has excelled in battery research at centres
such as the Faraday Institution, the report highlights critical gaps in
manufacturing infrastructure and policy co-ordination. The Faraday team argues
that building a resilient supply chain, from materials to modules, will require
targeted industrial support and long-term investment. One source told Argus of
the particular need for a battery manufacturing plan independent of a plan for
battery electric vehicle (BEV) manufacturing, given the more rapid growth of the
battery storage market worldwide. The world's largest battery maker, CATL, sold
381GWh of power batteries last year, up by 19pc on the year, while it sold 93GWh
of energy storage batteries, up by 35pc on the year. For the UK to build out its
own manufacturing capacity without government support, in the current climate,
will be "challenging", Ed Porter of UK battery energy storage market data
analysts Modo Energy told Argus . "That need not be a bad thing," he said. "The
end goal is to decarbonise at speed." The UK is already planning two battery
factories domestically. A 40GWh unit in Somerset is planned with Indian
conglomerate Tata , while a 10GWh facility in the Midlands is in the works with
China's Far East Battery . Both facilities will be operational by the end of
this decade (see map) . The two plants are "being proposed to fill the need" for
all electric vehicle (EV) batteries, said Aaron Wade, project director at global
battery industry association Volta Foundation, "making another plant unlikely".
The UK produced 276,000 EVs last year, including BEVs, plug-in hybrid EVs and
hybrid EVs, according to data from industry body SMMT, meaning a large number of
its 381,000 BEV sales last year were not domestically produced. And it is a
trend that may continue. "It makes most sense for battery plants to be located
on the continent, with easier transport and proximity to car factories," Wade
said. Battery demand is forecast to climb in other sectors too, such as
aerospace and off-highway vehicles, particularly if energy density and charging
performances improve. But many manufacturers, particularly those in niche
markets, will need aggregation or modular cell solutions to justify investment,
by either pooling funds with other end-users or using cells fit for several
applications. The UKRI's report comes as major markets China , the US and the EU
accelerate efforts to secure battery supply chains, often backed by state
support. Industry leaders warn that without a similar ambition, the UK could
find itself marginalised in the race to electrification. By Chris Welch Europe
gigafactory forecast (Sep '24) GWh Send comments and request more information at
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