Table of contents
Executive Summary
Towards the end of 2020, the UK government announced its ban on sales of new petrol and diesel vehicles from 2030. It was the second time that Prime Minister Boris Johnson pushed forward the cut-off for combustion engines – from its original 2040 deadline.
As the UK aims for the sunny uplands of net zero, by 2050 (hopefully), accelerating the motor industry’s transition to electrification is a priority – for employment as well as the environment. It will be clear within a couple of years whether the sector is on the right road. Safe arrival depends not just on motor manufacturers and buyers, but also complex supply chains, and investment in battery research and development, and crucially, manufacturing.
Cost & Range
As a market, electric vehicles (EVs) are fast approaching a tipping point. Cost, range and ease of charging are decisive factors for users. Advances in modern batteries have already gone a long way to resolving those first two issues.
Battery costs need to be competitive with those of combustion engines if EVs are to go mass market. In five years, the price per kilowatt-hour of power has more than halved to less than $150, and should drop below $100 within four years.1 This is seen as the commercial threshold for most consumers. Automotive manufacturers have their sights set on the $75/kWh threshold to achieve desired margins and returns on EV investment, while ramping up production. That goal could be a decade away.
Meanwhile, incremental gains are extending the range of EVs. The average is more than 300km and many models significantly exceed that.2
Ease of Charging & Speed
Charging – the availability of charging points and speed of charging – is a more vexed issue. Europe, including the UK, is more advanced than other markets, such as North America, in terms of density of charging infrastructure and standardisation of vehicles’ charging plugs (an EU initiative, supported by the UK).3
On England’s motorways and major A-roads, since 2020, a driver has never been more than 25 miles away from a rapid charge-point (50kW).4 To accelerate this rollout of EV charging infrastructure, the government announced £1.3 billion at the same time as the new 2030 deadline.5
Speed is essential. A robust charging network needs to be in place early this decade to support EV demand and achieve the phase-out timetable, according to industry experts and the National Infrastructure Commission.6 It called for a delivery roadmap with clear milestones to meet the 2030 target.
Meanwhile, the route plan for EV batteries is arguably more uncertain. Cell technology is not only central to the world’s sustainable energy future, this expertise also holds the key to the viability of the UK motor industry.
Among the many battery challenges, we focus on manufacturing capacity, research and development, and sustainability.
Production
Jump start need for UK battery output
The UK is playing catch-up in the global race for battery production.
China has almost 75% of the world’s capacity for manufacturing lithium-ion batteries, the dominant cell type for EVs.7 Japan and South Korea are next in line as battery producers. The US is languishing behind, but the Biden administration has begun to re-energise the EV market and supply chain.
When the EU’s European Battery Alliance was set up in 2017, Europe had little cell output. But, with some 440 industrial partners and around €100 billion in investment, it now expects that EU production will match demand by 2025.8 There has been a boom in new plants, with the supply chain following.9 Chinese and other Asian cell makers – such as CATL, LG Chem, Samsung have set up factories in Germany, Belgium, Hungary and other EU states, as well as the US.
Financial incentives from government add to the advantages of co-locating cell and vehicle production close to market. The threat of tariff barriers is another powerful driver. As it is for the UK, where post-Brexit, at least 55% of vehicle content must be sourced from home or the EU, if motor exports to Europe are to continue tariff-free from 2024. (On January 1, the ‘imported’ content permitted for batteries drops to 50% from 70%, making local sourcing essential.10) Without a UK battery manufacturing industry, car production would decline with the potential loss of more than 114,000 existing automotive jobs by 2040, the Faraday Institution has warned.11
Founded in 2018 with £78 million from the ‘Faraday battery challenge’ – part of the government’s Industrial Strategy Challenge Fund – the charitable trust funds research on electrochemical energy storage with universities and industrial partners.12 The Institution sees the need by then for eight battery ‘gigafactories’ – the term coined by Tesla’s Elon Musk, and now used for large plants producing the cells and modules used in EVs, usually also undertaking laboratory analysis, prototype engineering and R&D. By 2025, two would be needed to serve UK demand.
The Faraday Institution is convinced the UK is well placed to be a major player in battery production, but the signs hadn’t been good since the sharp drop in inward investment after the country voted to leave the EU in 2016.
Tesla chose Berlin for its European gigafactory in preference to the UK, blaming Brexit uncertainty. It has since surveyed another site in Bridgwater, though this may be with the energy, rather than EV, market in mind.
That left the Envision plant in Sunderland as the UK’s only major manufacturer. The business, bought from a Nissan joint venture in 2018, supplies batteries for Nissan and Renault cars, but had to lay staff off in 2020 following a drop in demand.
Jaguar Land Rover is building a battery assembly plant at its Hams Hall works near Birmingham, and a small plant is being developed in Coventry by Hyperbat, a joint venture between Unipart and Williams Advanced Engineering.13 Hyperbat is targeting high-performance applications for clients such as Aston Martin.
Neither measures up to gigafactory status. But construction of the UK’s first could start in 2021, subject to funding. Northvolt, which already has a gigafactory in its native Sweden, plans to build a £2.6 billion Britishvolt battery works at the former Blyth power station in Northumbria. Production would start in 2023, ramping up to 300,000 lithium-ion battery packs a year by 2027.14
The West Midlands – which hosts the government-funded £130 million UK Battery Industrialisation Centre in Coventry – has high hopes. Coventry City Council is partnering with the local airport company to promote its gigafactory site. They will bid for a share of the government’s £500 million fund for supporting battery production which, they believe, could start as early as 2025.15
February 2020 brought more positive news with Nissan’s promise to manufacture its powerful 62kWh battery in Sunderland, which was one of the first sites in Europe to make EV batteries. The decision secures car production on Wearside and tariff-free export to the EU in the longer term.16
Further investments are needed to safeguard the UK automotive sector as a whole. One potential advantage is the strength of the chemicals sector. The Advanced Propulsion Centre, a joint venture between government and the auto industry, in June 2020 predicted a £12 billion market opportunity in batteries for UK companies to 2025.17 Key links in the value chain are cathode materials refining, manufacture of cathodes, anodes and electrolyte, cell assembly, and battery pack components.
The chemistry of cells, and their cathodes in particular, is crucial in battery production and development.
R&D
The global race in battery technology
Amid the global competition to be a battery powerhouse, there is a concurrent cell technology race.
Lithium ion is dominant cell type, and will continue to be in the medium term, but the chemistry varies. Different cathode combinations of cobalt, manganese, phosphate and iron are used. Nickel manganese cobalt (NMC) is currently the most popular design for EVs with an estimated 80% of the global market, and rising.18
The trade-off with NMC designs – and alternative battery technologies – is between cost, safety, energy density (which affects range) and life cycle.
Cobalt, in particular, is expensive and raises ethical concerns too (see below). One innovation is the move to high-nickel NMC batteries. The materials are cheaper and energy higher, but cycle times are lower and manufacturing costs higher. General Motors and LG Chem are developing the Ultium battery that substitutes aluminium to use 70% less cobalt,19 while Panasonic and Tesla are working on a cobalt-free, high-density design.20
Israel’s StoreDot, which has raised $130 million from backers including Daimler, Samsung, TDK and BP, replaces graphite in its Li-ion cell’s anode with semiconductor nanoparticles, currently based on germanium (to be replaced by cheaper silicon). It promises the ‘holy grail’ of a full charge in five minutes, but this would require chargers that are higher- powered than today’s. Using current infrastructure, it is aiming for a 100-mile charge. A thousand engineering samples (made in China) were delivered to carmakers and other partners in January 2021.21
In the future, EVs could be powered by sodium-ion or lithium-sulphur batteries. Lithium sulphur is lighter, stores more energy and potentially cheaper, but the lifecycle currently limits applications. The UK has manufacturers and leading academics in the field, with the potential for breakthroughs for powering short-range flights and flying taxies, if not EVs by 2050, according to the Faraday Institute. Sodium is low cost and abundant. It launched the NEXGENNA programme – in addition to more than 70 battery challenge research projects22 – to develop a new generation of batteries in 2019.
Solid-state batteries – without a liquid electrolyte – are seen as the cell technology of the 2030s. In theory, they could surpass the performance, safety and processing limitations of lithium-ion batteries. Higher risk but with the potential for high rewards, solid-state technology is the focus of research around the world.
Seven UK universities participated in Faraday’s £12 million SolBat research programme, launched in 2018.23 More recently, QuantumScape – which is backed by Volkswagen and Bill Gates – claimed to have solved the complex technological problems. QuantumScape is building a pilot production factory in San Jose, California – ahead of volume production for its German partner, promised by 2024.24
Developers betting on lithium-ion breaking the $50/kWh barrier see only false dawns for scaling solid-state technology, but the massive size of the prize will continue driving battery research.
Sustainability
Searching for a circular life cycle
If batteries are the ‘new oil’, their raw materials are the centre of a 21st century gold rush. As a result, the EV market is exposed to risks around supply, price hikes, sustainability and ethics.
More than 70% of cobalt is mined in the Democratic Republic of Congo, much of it by artisans and small companies. Apart from concerns about environmental damage and human exploitation, if EV sales take off in the 2030s, projected supply could meet only half forecast demand by the middle of the decade.25 This is even with new production from Australia and Indonesia.
Lithium demand is set to rise six-fold by 2030, but the supply base is more diverse, and low-risk mines in Australia, Argentina and Chile can fill the gap. Meanwhile, the nickel deficit could be met by Indonesia, but again with concerns about environmental and social governance.
Chinese domination is another worry. With state support, companies have invested heavily in controlling the mining and refining of lithium, cobalt and nickel, as well as battery manufacture. China controls 70% of cobalt supply, and 70-90% of refining capacity for cobalt and lithium, respectively.26
The Faraday Institution is sanguine about the security of supplies to a burgeoning UK battery manufacturing sector, but does warn of likely bottlenecks in supply chains. A separate SWOT analysis of UK manufacturing in 2020 also highlighted heavy reliance on the Chinese supply chain for materials and parts, and recommended diversification.27
There are at least two other high-stakes quandaries for the EV battery industry, concerning safety and sustainability.
Characteristics vary with materials, but cells and their electrolyte are vulnerable to thermal runaway events that bedevil reliability, bulk transport and storage. Current best practice involves standalone, sacrificial buildings and a ‘let it burn’ approach. Apart from efforts to develop safer batteries and co-locate production close to vehicle manufacture, research is ongoing to manage the risk. Faraday’s Project Detain brought together Unipart logistics, Aspire Engineering, MIRA and Instrumentel to identify detection and containment options and specify how to test them.28
The sustainability conundrum is more existential even than the safety challenge. The whole purpose of EVs is to provide a sustainable alternative to fossil fuels amid the climate crisis. To evade defeat, the carbon and wider environmental footprint of the entire industry must be optimised from extraction of raw materials to end-of-life batteries.
A second-life strategy for batteries and mineral resources is essential to make this global giga-sector part of the circular economy.
The Faraday Battery Challenge is encouraging work on second-life applications such as domestic and industrial energy storage, as well as recycling. Led by the University of Birmingham, the ReLib project aims to recycle close to 100% of the materials in spent lithium-ion batteries using robotics and other technologies for separation and purification.29
Batteries in production today will be piling up for disposal or re-use in 10 years’ time as EV demand rises exponentially. The capability to recycle these components and minerals presents another massive opportunity, and a necessity, for sustainability and UK Plc.
1https://www.woodmac.com/news/the-edge/future-energy–how-evs-transform-battery-demand/
2https://ev-database.org/cheatsheet/range-electric-car
3https://www.youtube.com/watch?v=pLcqJ2DclEg&utm_source=newsletter&utm_medium=email&utm_campaign=thememo&cdlcid=5f23ff756be319c3c33f1fb3
4https://www.gov.uk/government/publications/government-vision-for-the-rapid-chargepoint-network-in-england/government-vision-for-the-rapid-chargepoint-network-in-england
5https://www.gov.uk/government/news/government-takes-historic-step-towards-net-zero-with-end-of-sale-of-new-petrol-and-diesel-cars-by-2030
6https://nic.org.uk/studies-reports/annual-monitoring-report-2021/
7https://www.woodmac.com/news/opinion/batteries-with-chinese-characteristics/
8https://ec.europa.eu/growth/industry/policy/european-battery-alliance_en
9https://www.spglobal.com/platts/en/market-insights/latest-news/electric-power/091620-china-continues-to-dominate-global-ev-supply-chain-bnef
10https://www.theguardian.com/politics/2021/jan/03/uk-carmakers-have-three-years-to-source-local-electric-car-batteries
11https://faraday.ac.uk
12https://www.gov.uk/government/collections/faraday-battery-challenge-industrial-strategy-challenge-fund
13https://hyperbat.com
14https://www.expressandstar.com/news/business/2021/01/27/will-electric-cars-spark-a-boom-for-british-
16https://www.bbc.co.uk/news/business-55757930
17 https://www.apcuk.co.uk/app/uploads/2020/06/APC-Passenger-car-electrification-report-online-v1.pdf
18Faraday Insights – Issue 6: December 2020 – Lithium, Cobalt and Nickel: The Gold Rush of the 21st Century
19https://www.ultiumcell.com/latest-news/2021/02/20/Ultium-Cells-Celebrates-Development-Milestone 20https://www.woodmac.com/news/opinion/batteries-with-chinese-characteristics/ 21https://www.theguardian.com/environment/2021/jan/19/electric-car-batteries-race-ahead-with-five-min-ute-charging-times
22https://faraday.ac.uk/wp-content/uploads/2019/10/FaradayBatteryChallenge_FundedProjects_Sep2019.pdf
23https://faraday.ac.uk/research/beyond-lithium-ion/solid-state-batteries/
24https://electrek.co/2021/02/16/quantumscape-announces-pilot-battery-production-factory-california/
25https://www.woodmac.com/news/the-edge/future-energy–how-evs-transform-battery-demand/
26https://www.woodmac.com/news/opinion/batteries-with-chinese-characteristics
27https://www.mdpi.com/journal/sustainability – A SWOT Analysis of the UK EV Battery Supply Chain
28https://faraday.ac.uk/wp-content/uploads/2019/10/FaradayBatteryChallenge_FundedProjects_Sep2019.pdf
29Ibid
