UK EV battery industry could be worth £2.7 billion per year

WMG new report

A new report shows that UK companies are well-placed to supply valuable materials needed for batteries to be built in UK – a potential £2.7 billion per year business opportunity. The report was commissioned by WMG at the University of Warwick, and launched to the Chemical Industry Association at the Chemistry Growth Partnership meeting in London.

The research underpinning the report brought together experts and data from the automotive battery industry and chemicals industry, working in the context of the UK’s Industrial Strategy. It points to a large UK battery manufacturing industry opportunity. The report was funded by EPSRC, commissioned and managed by WMG at the University of Warwick acting in their role as the Advanced Propulsion Centre Electrical Energy Storage Spoke, and delivered in partnership with E4tech.

WMG’s Professor David Greenwood, one of the report’s authors said“This report details a massive opportunity to grow a UK battery chemicals industry and related supply chain. The UK’s Industrial Strategy identified battery development and manufacture as one of the four initial Grand Challenges to coalesce industrial activity upon high growth opportunities. Battery pack manufacturing for electric vehicles (EVs) will logically take place close to the point of vehicle assembly since packs are hard to transport. This in turn implies that the battery cells which make up the packs will best be manufactured in (or close to) the UK. This could also mitigate the loss of vehicle engine production.”

“However for cell production to occur in the UK, the supply chains of chemicals would need to be reconfigured, since most cell production and chemicals supply is currently in Asia. Whilst such components could be imported, to capture the most value cell production and the related chemical and process equipment supply would need to come from UK suppliers.”

The report notes that the UK manufactured 1.7m cars in 2016, around 80% of which were exported (SMMT 2017). Assuming that 50% of the vehicles manufactured in 2030 are electrified vehicles (EVs and PHEVs), and taking into account the expected falls in battery cost, the corresponding value of cell materials per car will be £3,200, worth £2.7bn per year to the UK chemical industry just for UK-built cars, with export potential to Europe of ten times that.

This would see a UK vehicle battery industry requiring these volumes of materials in any one year: