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.
