UK battery gigafactory lands £1.7bn of funding from Abrdn and Tritax


Two of the City’s biggest companies have thrown their weight behind a groundbreaking British electric battery ‘gigafactory’ with £1.7billion of funding.

Financial giant Abrdn and warehouse group Tritax backed the Britishvolt project, which is expected to open in 2024, after it clinched a Government grant of £100million.

Britishvolt’s facility is set to be constructed in Blyth, Northumberland, on the expansive 235-acre (95 hectare) grounds of the former power station and will create 3,000 UK jobs at the site and a total of around 8,000 in the supply chain.

It will produce the fuel cells needed for 300,000 electric vehicle batteries when it hits peak capacity and is seen as a key driving force for the supply of new EVs ahead of the 2030 ban on sales of new petrol and diesel cars.

Britishvolt's £3.8billion plant (pictured: impression picture of the plant) will create 8,000 jobs in the North East in a boost for Government pledges to 'level up' the regions

Britishvolt’s £3.8billion plant (pictured: impression picture of the plant) will create 8,000 jobs in the North East in a boost for Government pledges to ‘level up’ the regions

The site will be one of the biggest ‘gigafactories’ in Europe and – once completed – the fourth largest building in the whole of the UK. 

Politicians and manufacturers hope the project will make the UK less dependent on foreign imports and breathe fresh life into Britain’s car industry.

Its success, along with that of the new £1billion Nissan-Envision battery gigafactory at the Japanese car maker’s Sunderland plant, will also be utilised to instill confidence in manufacturers to shift production hubs to the UK.

The site will be one of the biggest 'gigafactories' in Europe and - once completed - the fourth largest building in the whole of the UK

The site will be one of the biggest ‘gigafactories’ in Europe and – once completed – the fourth largest building in the whole of the UK

The Blyth gigafactory, along with the new £1billion Nissan-Envision battery production site,  will be utilised to instill confidence in manufacturers to shift production hubs to the UK

The Blyth gigafactory, along with the new £1billion Nissan-Envision battery production site,  will be utilised to instill confidence in manufacturers to shift production hubs to the UK

Business Secretary Kwasi Kwarteng (left) pictured during a visit to the 235-acre (95 hectare) Blyth gigafactory site, which was formerly the grounds of the power station

Business Secretary Kwasi Kwarteng (left) pictured during a visit to the 235-acre (95 hectare) Blyth gigafactory site, which was formerly the grounds of the power station

It will also play a key role in the Government’s ‘levelling up’ agenda to boost high-skilled employment in the regions.

Business Secretary Kwasi Kwarteng said: ‘Britishvolt’s planned gigafactory will not only enable the UK to fully capture the benefits of a booming electric vehicle market, but will bring thousands of highly skilled, well-paid jobs to the North East.’ 

Britishvolt’s funding comes two months after Johnson Matthey, which makes an estimated one-in-three car catalytic converters worldwide, ditched its own electric battery division. Johnson Matthey developed a successful technology, but said it would not be profitable to continue because it faced too much foreign competition.

The electric battery market is concentrated in Asia, including in China and Korea. 

Britishvolt’s £3.8billion project has already received around half the funding it needs to take it to completion. Private investors and companies including Glencore stumped up £100m in the early stages.

Ministers have invested £100million in the pioneering electric car battery factory in Blyth, Northumberland

Ministers have invested £100million in the pioneering electric car battery factory in Blyth, Northumberland

The site (impression shot pictured) will be one of the biggest 'gigafactories' in Europe

The site (impression shot pictured) will be one of the biggest ‘gigafactories’ in Europe

It is due to open by early 2024, having gained planning permission last year

It is due to open by early 2024, having gained planning permission last year

The Government’s grant – from the Automotive Transformation Fund – is thought to have been worth another £100million. 

Abrdn and Tritax’s investment was conditional on the company receiving this state funding.

Britishvolt has indicated there will be a number of announcements in the coming weeks that will include agreements with future customers. 

It is also keen to supply European car makers, as well as those in Britain. 

James Dunlop, chief executive of Tritax, said they and Abrdn ‘are proud to be working alongside Britishvolt, the Government and a world-class professional team to unlock a greener future for UK plc’. 

Daniel Clarke, analyst on the Thematic Research Team at GlobalData, a leading data and analytics company, said the Britishvolt announcement on Friday was a case of ‘one down but several more needed’.

‘As an electrified world becomes more inevitable by the day, Western governments are working around the clock to fund and scale-up domestic battery supply chains,’ he explained.

‘This new gigafactory has the capacity to produce 300,000 batteries per year. This is clearly a step in the right direction for the UK. But further work lies ahead.

‘The number of EVs sold is expected to exponentially increase. In 2025, the United Kingdom hybrid and electric cars market is forecast to have a volume of 656,850 units, an increase of 100.4 per cent since 2020. 

‘The UK government must further incentivize and fund several more of these gigafactories to meet demand—especially if it wants to avoid being reliant on battery makers in other countries such as China.’

Q&A with Isobel Sheldon, Britishvolt’s Chief Strategy Officer 

by Rob Hull, Motoring Editor for Mail Online & ThisisMoney 

Isobel Sheldon, chief strategy officer at Britishvolt

Isobel Sheldon, chief strategy officer at Britishvolt

A year ago, This is Money sat down with Isobel Sheldon from Britishvolt to find out more about the nation’s first gigaplant and the decisions that drove the company to the North East…

This is Money: What was the driving decision behind choosing Blyth as the site for the gigaplant?

Isobel Sheldon: ‘The former power station is a brownfield site, on flat land and the renewable resource is already there. But Blyth also provides us with enough space – and we need lots of it. 

‘We require around 95 hectares for the plant alone. This is going to be the fourth largest building in the UK, the sixteenth largest in the world and the second largest gigaplant in existence, only behind the Tesla Nevada gigafactory.

‘However, we’re also looking to integrate the supply chains for materials and components at the site, so we need access to around 120 hectares to make that feasible. The location we’ve committed to purchasing provides up to 135 hectares.’

TiM: Is bringing the supply chain to the site simply a matter of keeping costs down and avoiding import and export charges?

IS: ‘There is a huge importance to bringing the supply chain onboard because most of the material production processes are currently taking place in countries with high carbon content on their grids because they are very coal reliant. That is where a significant carbon output on the supply chain lies.

‘By bringing them on site, we can run the processes off renewable energy so that we can cut the carbon content of the supply chain and have direct access to the materials at the cell-manufacturing site.

‘This will also help us to control costs, as these materials currently move through a number of companies in several countries, acquiring a margin each time they do so.’

Blyth Port, which has its own integrated wind turbine - is in such close proximity to the gigaplant that the company says it could use electric drayage trucks to take materials to the facility to also make that element of production low carbon

Blyth Port, which has its own integrated wind turbine – is in such close proximity to the gigaplant that the company says it could use electric drayage trucks to take materials to the facility to also make that element of production low carbon

TiM: Were there any other benefits of choosing to set up manufacturing in the North East? 

IS: ‘There’s an existing rail line in place, which previously had a branch into the power station when it was operational. This has been closed but can be reinstated, so products can be transported by rail.

‘The deep water port is also just 1.5km (0.9 miles) from the facility, so we could even use electric drayage trucks to take materials to the facility so that element of production is low carbon also.’  

TiM: Do you foresee any battery-making competition coming to the UK?  

IS: ‘We’re not aware of any other applicants for gigaplant status, but that isn’t to say there aren’t any potential rivals. 

‘However, considering we’ve just turned down the only other location in the country suitable for a plant due to timescale – and already secured the only other UK site viable – we think we’re in a strong position.’ 

A view of the Tesla Gigafactory construction site in Gruenheide near Berlin, Germany, earlier this week

A view of the Tesla Gigafactory construction site in Gruenheide near Berlin, Germany, earlier this week

A German court has ruled that automaker Tesla has to stop clearing trees on the site where it's building its first electric car factory in Europe

A German court has ruled that automaker Tesla has to stop clearing trees on the site where it’s building its first electric car factory in Europe

TiM: China unquestionably has a stronghold on the electric battery market. How do you combat that?

IS: ‘We see our competition in Europe, not China. That’s because shipping batteries half way across the world isn’t sustainable.

‘As demand for EVs rises, you will soon have 750,000 vehicles being manufactured in Europe. If they’re all using batteries imported from China, you have around a $1billion-worth of batteries on the water at any given time. That simply isn’t viable. So we have to localise manufacturing of batteries in Europe and the UK.

‘You also have to consider that China’s electricity grid is around 80 per cent reliant on coal and – as a result – the local air quality there is atrocious. If we continue to import products made in China for a green industry, all we’re doing is exporting our carbon problem elsewhere.’ 

The Britishvolt gigaplant will be located at the former grounds of Blyth Power Stations, which were demolished between 2001 and 2003. One worker was killed during the demolition work, in May 2001, crushed underneath an electrical connection box which fell from a wall

The Britishvolt gigaplant will be located at the former grounds of Blyth Power Stations, which were demolished between 2001 and 2003. One worker was killed during the demolition work, in May 2001, crushed underneath an electrical connection box which fell from a wall

TiM: How will the cells for EV batteries compare to those already in the market?

IS:All our competitors – LG Chem, Samsung, Northvolt – do the same. They pitch their cells to manufacturers based on how much they cost and the technical data. It’s a very off-the-shelf solution.

‘That’s fine for small, relatively inexpensive, cars because you want the lowest cost possible and you’re not so worried about range or performance targets. 

‘But around 30 per cent of European-made vehicles are premium models – in the UK it’s around 70 per cent. When you have luxury vehicles that weighs around two tonnes, you can’t use the same battery as you’d put in a Renault Zoe, for instance.

‘This is a big issue in the market that is growing. This is because the premium brands need more technology in order to be compete with Tesla – and they can’t do that now.

‘We’re targeting a capacity increase that will allow the premium sector to compete with – if not beat – Tesla, so rival car brands will finally be able to marry quality with performance, while also keeping costs competitive. This gives us market appeal across Europe.

‘If we can increase battery performance by up to 30 per cent, suddenly a five per cent tariff for European makers doesn’t appear as too much of a problem. But of course we all want there to be a deal at the end of the day to give us free access to the European Union.’

TiM: Will there be capacity to recycle older car batteries at the new gigaplant? 

IS: ‘Another element of having the co-located supply chain is that we can introduce the facility to recycle and recover battery materials that can be put straight back into the active manufacturing process.

‘There’s been a longer-than-expected delay for EV batteries to come back from market. This is simply because they are lasting longer than many people originally thought they would. 

‘For this reason, if you setup a recycling centre now to receive up to 30,000 tonnes of waste batteries, it wouldn’t be viable for another ten years because there isn’t enough feed stock coming back, as the batteries are still being used in vehicles on the road. 

‘You also have to consider the second-life applications of batteries, such as using them in storage units or back-up generators. In these cases, the batteries aren’t going to come back for 16 or 17 years. 

‘By the time we have enough feed stock to make the recycling process viable from a business perspective, we will have a dedicated centre in place on site. This will be around 2027 and 2029, depending on what the feedstock situation looks like.’

Britishvolt said its plans include a recycling centre, where batteries taken from end-of-cycle electric cars can be broken down and 30% of their materials reused in cell manufacturing

Britishvolt said its plans include a recycling centre, where batteries taken from end-of-cycle electric cars can be broken down and 30% of their materials reused in cell manufacturing 

TiM: How do you recycle batteries? And how much of an old battery can be reused?

IS: ‘The current process used for recycling is to heat the battery up to an extremely high temperature so that you end up with a black mass of alloy metals. 

‘However, the much more eco-friendly method is to use a lower temperature to separate and recover the materials. Around 30 per cent of the materials are recoverable and able to go back into the manufacturing process of new cells.’ 

TiM: Will the UK gigaplant only produce cells for passenger car batteries? 

IS: ‘No. 

‘Passenger EVs spend most of the time sat in a driveway or an office car park and aren’t driven all the time. On average, owners use around just 25 to 30 per cent of the available battery capacity a day. 

‘However, buses and trucks spend around 80 per cent of the time in use, which causes a particular problem as the battery pack won’t last for six or seven years with that level of operation.

‘At Britishvolt, as well as a passenger-car specific cells, we’ve looked at the aggregate of all the heavy-duty vehicle applications and identified that there’s enough market demand to make it economically viable to produce a cell specifically targeted for these types of vehicles, with the cycle life they need to make their business models viable.’

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