What are GigaFactories & Why Do We Need Them?

The Collapse of BritishVolt is potentially a Disaster for the British Motor Industry

British Volt which was going to set up a huge GigaFactory in the UK, has gone out of business. Why is this a huge blow for the British automotive industry, and what it could mean for you and me?

If you saw the news on Tuesday, the UK startup – actually backed by money from Dubai – went into administration yesterday. Now when this thing was announced a few years ago it was described as a levelling up opportunity by the government. 

A £3.8 billion pound investment to create a facility the size of 50 football pitches, which would have made it the fourth largest building in the UK, and potentially employing up to 3000 people in Blyth, Northumberland, all just to make car batteries for electric vehicles – and remember by 2030, only EVs can be sold new in the UK. 

However, it’s now going into administration ‘due to insufficient equity investment’ it’s reported, and the 232 people working there have been made redundant.

Now it’s possible the project might still be picked up by someone else, and fingers crossed that will happen. 

What exactly is a giga factory?

The term comes from Elon Musk, who set up the first ginormous GigaFactory in the Nevada desert. Basically, the very expensive raw materials to make battery cells, chiefly stuff like intensively mined lithium, goes in one end, and even more expensive battery cells come out the other end. 

As well as being expensive, they’re heavy. As we already know, this is why for example a typical family car in electric form can be almost twice as heavy as its petrol counterpart. 

GigaFactories are ideally meant to be set close to car factories, so you reduce the energy required to transport them to assembly plants. Remember this is electric cars we’re talking about, and we already know that the carbon footprint of producing a typical EV is about 26 tons, compared to just 7 tons for a regular internal combustion engine car. 

That kind of defeats the whole point of those things which is that they’re meant to be kinder for the environment. As you can imagine car manufacturers and governments desperately need to get that tonnage down, dramatically down. 

Another is self-reliance. As we now know, falling out with a country like Russia impacts our energy supplies but also raw materials like steel and aluminium to make our cars. 

China, has the greatest number of giga factories – over 100 in fact. America has several and over 30 are planned for Europe. As you can see there’s a global race on to build these huge battery plants. 

In the UK we have one – that’s Chinese-owned, and it’s basically sits near and serves the Nissan plant in Sunderland. It has a 1.7GWh capacity – make a note of that number, 1.7GWh. There’s a billion-pound investment to take it up to 9GWh by mid-decade, and by 2030, further investment should take it up to 25GWh. 

A big number, right? Well according to the SMMT – the society for motor manufacturers and traders – reckons that by 2030, we actually need to have at least 60Gwh – 60GWh – Great Scott. 

That would enable the production of 1 million cars in the UK. We actually need about four or five GigaFactories to sustain the UK car industry and the only one that was happening has now stalled. 

How crucial is the car industry in the UK, and why could this mean that we’ll actually be running old petrol and diesel cars for many many years after the 2030 ban instead of driving new EVs?

Well let’s look at the UK motor industry – according to the SMMT – it contributes about £67 billion turnover and £14 billion added value to the UK economy. It also invests around £3 billion on research and development for new technology like several developments in better battery technology happening here in the UK right now, but the benefits of which will probably be felt elsewhere – most likely China – because we won’t have the facilities to do anything about it. 

The car industry employs 182,000 people in manufacturing and around 780,000 across the wider industry – all those jobs will be at risk without those giga factories. 

Vehicles account for 10% of total UK exports, sending vehicles to over 150 countries, in fact 80% of our cars are exported, generating £77billion of trade. 

We have over 30 manufacturers making over 70 models. That’s nearly 900,000 cars and over 70,000 commercial vehicles a year with 1.6 million engines made in the UK. 

Not having GigFactories will be a huge set-up to those levels of production. Now of course, we could just continue to import battery cells. Top end luxury brands like Bentley, Rolls-Royce, Aston Martin etc, can easily tap into the German supply and the added cost will make little different to the already high sale prices and huge profitability of those types of cars. 

Stellantis has already announced that for its electric van hub at its Ellesmere Port plant, the batteries will come from a GigaFactory in northern France. 

But here’s another kicker, and it’s thanks to our old friend Brexit. Batteries are expensive and heavy to transport, but post-Brexit rules require that by 2027 up to 70% of a vehicle’s battery cost must originate in Britain or EU, or exports will face tariffs.

In other words, with 80% of our cars normally exported, even if we keep building them, we won’t be able to export them, because they’ll just be too expensive. 

What does all this mean then? Basically, the UK car industry could diminish even further, without those exports, making cars here just won’t be viable anymore. 

Jaguar Land Rover might move lock-stock and barrel to its parent’s home in India, and we’ll all be driving around in Nissan EVs – nothing wrong with that, they’re great cars, you can check out my reviews, but it means our choice will be somewhat limited. 

All is not lost, we may still continue to have JLR here for example, thanks to a joint-venture that is exploring the potential for a new GigaFactory in Coventry, pretty much the home of JLR. The council is backing the project but large-scale funding is yet to be secured. 

There is another alternative. Drop the 2030 deadline for banning the sale of new internal combustion engines!

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