Give gigafactories special status to avoid repeat of Britishvolt failure, MPs say

A report launched as the Britishvolt project collapsed earlier this year has warned that a range of measures to incentivise electric vehicle (EV) battery production must be introduced to prevent the decline of the UK car industry.

A report by the cross-party Business and Trade Committee says that hundreds of thousands of jobs, including many in the North East, are at risk if the issue is not addressed. The committee argues that the UK could become a “frontrunner” in building “sustainable and ethical batteries” but says that the UK automotive industry is currently too reliant on batteries from Asia.

The MPs launched their investigation into the battery sector as Britishvolt, which was bidding to build a gigafactory in Northumberland, went into administration. The company was later bought by Australian start-up Recharge Industries but that firm has also run into difficulties and has not yet completed the purchase.

Read more:calls for answers on Britishvolt site

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Separate plans have been announced by Jaguar Land Rover owner Tata for a gigafactory in Somerset, while Nissan’s partner Envision AESC is expanding its battery production site in Sunderland. An announcement from the Government on the publication of an Advanced Manufacturing Plan and the Battery Strategy is expected this week.

But MPs have warned that finance, skills shortages, energy costs and lower subsidies than other countries are threatening the development of gigafactories in the UK. They have called for gigafactory sites to be given special economic status to ensure plans come to fruition.

The report says: “There are limited number of potential gigafactory sites—but we have enough sites in the UK to meet the nation’s needs, including sites in the UK’s key automotive clusters. These sites are strategic national assets and should be treated as such. The Government must designate gigafactory sites as strategically important sites and work with local partners to put together a targeted package of support, with a view to attracting investors and ensuring gigafactories can be built at pace.

“These sites should be given priority for improvements to energy and transport infrastructure. The Government should work with local partners to grant those areas special economic status.”

Labour MP Liam Byrne, who chairs the committee, said: “Power was at the heart of the industrial revolution, and it will be at the heart of the green industrial revolution. But right now, the UK is on course to secure barely half of the electric battery capacity needed by the domestic car industry alone.

“Unless we fix this fast, we risk the industry simply relocating to Europe or the US or becoming reliant on imports from China and elsewhere. That imperils 160,000 jobs and a jewel in the UK’s industrial crown. Now is the time to act.”

A Department for Business and Trade spokesperson said: “In the past few months the Government has secured a £4bn investment from Tata in a new gigafactory, and £600 million to build the next generation of electric Minis. This comes on top of a previous £1bn investment in an Electric Vehicle hub in Sunderland by Nissan and their battery supplier AESC.

“Taken together these major investments demonstrate that our plan for the automotive industry is working and continuing to deliver results. Later this week we will publish a wide-ranging Advanced Manufacturing Plan and the UK’s first Battery Strategy, both of which will ensure we continue to place the UK at the forefront of global supply chains.”

The report outlines how gigafactory start-up Britishvolt, which owned a site in Northumberland, went bust in January after running out of money. The company has been sold to Australian start-up Recharge Industries, but that company has also faced difficulty and has not yet been able to complete that deal.

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