Written evidence from Intelligent Energy (BEV0020)

House of Commons Business Energy and Industrial Strategy Select Committee inquiry: Batteries for electric vehicle manufacturing – Intelligent Energy response

Introduction

1. Intelligent Energy (IE) is a UK owned fuel cell engineering company with a 250 strong personnel team based in Loughborough, Leicestershire. IE focuses on the development, manufacture and supply of its world leading PEM fuel cell products for UK and global customers across automotive, stationary power, material handling equipment (MHE), construction equipment and Unmanned Aerial Vehicle (UAV) sectors (see images in the annex).
2. The basis of our submission to this Committee’s inquiry is that the UK needs to focus on its strengths in producing zero emission powertrains – and that includes fuel cell systems alongside battery-based systems. The national conversation around gigafactories has typically revolved around batteries when both technologies will be essential to achieve decarbonisation and deliver net zero targets across national and international transport activities – and both need local production at a gigafactory scale.
3. The collapse of BritishVolt leaves the UK at a disadvantage compared with Europe and the United States, and significantly behind China, on battery technology. BritishVolt may be replaced by another investor, but the message for the UK is clear: playing catch-up on battery production is a necessity but the UK should also invest in fuel cell systems production as an existing technology to yield a competitive advantage over suppliers elsewhere. We do not want to be playing catch-up on fuel cell production some years down the line because we failed to invest now.

4. There are four key points we wish to make in this regard:

a)      Fuel cell technology is well established in the UK and increasingly on a global basis in North America and the Far East. IE for example provided the fuel cells to power the first manned flight of a zero emission hydrogen fuel cell aircraft, in conjunction with Boeing in 2008; IE’s joint venture with Suzuki saw the first European Whole Vehicle Type Approval accreditation of the fuel cell powered Burgman motor scooter in 2014; IE fuel cells powered a fleet of London Black Cabs (developed with Lotus and LITC- Geely) introduced in 2012 to operate in conjunction with the London Olympics and then on London roads for over 100,000kms over the next 4 years; IE’s fuel cell power module for UAV operation achieved a world record for a 12 hour 13 minute flight duration in 2021. More information can be found on the Intelligent Energy website at https://www.intelligent-energy.com/news/

b)      The total cost of ownership and whole life economic cost of fuel cells (which are 95% recyclable with essentially no hazardous content) favours this technology given the logistical challenges that battery systems face if rolled out extensively (rare earth minerals and lithium recycling and the lack of major upgrading to the National Grid to power them, to name just two).

c)      Fuel cell technology is under-valued in the context of wider decarbonisation and net zero impacts and in applications that are not readily appreciated – such as construction plant and equipment.

d)     There is both a strategic and an economic advantage, and momentum to be gained, through investing early in UK gigafactory capacity. Deploying fuel cell technology in the UK will build momentum for applying automation to production processes, to up-skilling the UK production workforce, along with up-skilling support service provision and a technology life cycle management capability throughout multiple applications and related supply chain and support capabilities.

e)      This is a once-in-a-generation opportunity for the UK to invest in gigafactories that will build the transport technology of the future. The UK can and should be at the forefront of the green revolution, or it will instead be the United States, South Korea, and China who will do so. Investment in gigafactories can also give a new lease of life to the UK’s automotive sector as it transitions away from fossil fuelled engines to zero emission powertrains.

5. Given the inquiry is mostly focussed on BEVs, our response to individual questions is limited to those we can provide direct insight into.

We are delighted to be able to submit a response to the Committee’s inquiry and Intelligent Energy’s CEO would be willing to take part in an oral evidence session to discuss these issues further if that would be of interest to the Committee. In addition, we would be willing to provide a briefing session to committee members and staff on fuel cells.

Questions

6. Is there enough UK vehicle manufacturing demand in the UK to support gigafactories?

f)       Yes, there is a clear demand in the UK for electrified vehicles to support investment in the creation of gigafactories. A Fuel Cell Electric Vehicle (FCEV) is an electric vehicle. It generates electric current onboard the vehicle via an electro-chemical process with the fuel cell utilising hydrogen (stored onboard) as the fuel, with no emissions other than water vapour. A FCEV has a comparative range and productivity advantage, with no compromise on performance and load carrying capacity. Fuel cell propulsion systems are thereby deemed economically preferable for intensively operated commercial vehicles (bus and coach, van and truck, rail and non-road mechanical machinery) where 10+hour per day duty cycles and short refuelling cycles (achieved in 8 to 15 minutes for a van to an HGV) mean ample flexibility to meet onerous operational duty cycles. These vehicle types are forecast to be increasingly autonomous (and ultimately driverless by 2050) in running continuous shuttle services for freight and passengers so the fuel cell and hydrogen productivity advantage will increasingly come to the fore.

g)     Gigafactory capacity is essential for both fuel cell and battery technologies to cover current, near term and future supply across transport sector powertrain requirements.  Manufacturing strategies for both technologies can be readily scaled and factory layouts flexed in line with demand and delivery needs. The relative overhead of site size and preparation plays against battery systems which require diverse raw materials and configured supply chains and related material storage ahead of staged integration and final battery production.

h)     Fuel cell systems utilise readily available materials and components that can be assembled line-side or batch delivered as required. Manufactured fuel cell systems can be readily packaged and safely shipped to final markets and customers, whether domestic or globally. This is not readily achievable for battery systems due to mass and safety considerations, so a UK battery gigafactory would typically be more focused on ‘local’ customers and markets than wider, cross border customer supply. 

7. Will the UK have sufficient battery production supplies by 2025 and 2030 respectively to meet the government phase-out plans for petrol and diesel vehicles?

i)       N/A

8. Is UK-based battery production necessary to support the manufacture of electric vehicles in the UK?

j)       N/A

9. What are the risks to the UK automotive industry of not establishing sufficient battery manufacturing capacity in the UK?

k)     The inevitable risk in not having sufficient fuel call or battery system production capacity in the UK is that vehicles will be produced at volume abroad and imported into the UK. We may end up with a transport sector decarbonisation gain but the economic gain from production and supply will largely be held abroad.

10. What other domestic end uses for batteries would provide a market for UK battery production?

l)       N/A

11. Does the UK have a sufficient supply of critical materials to support vehicle battery production?

m)   N/A

12. How ready are UK vehicle producers for the EU–UK Trade and Cooperation Agreement (TCA) rules of origin (ROO) phasing in from 2024?

n)     N/A

13. What can the UK learn from investment in other countries in the establishment of gigafactories?

o)     Battery and fuel cell gigafactories are becoming an established format for addressing options for factory scaling, production automation, end-of-line testing, supply chain configuration, and direct or partnered delivery to market sectors and key customers. While there are few ‘optimal templates’ for translation to a successful UK battery or fuel cell gigafactory there is a key message to be derived – which is that others have seized the initiative and gained momentum and experience in creating gigafactory platforms – and that those platforms will obtain a competitive advantage, if not a comparative technology advantage, for the UK to overcome.

14. Do we have the skills in the workforce required for the production of batteries? If not what needs to be done?

p)     N/A

15. Will the cost of UK batteries be competitive compared with batteries produced elsewhere?

q)     N/A

16. What impact will the European Union’s proposed Carbon Border Adjustment Mechanism have on UK production?

r)       N/A

Annex

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