Written evidence from Karl Pestell (Director at RGJ Consulting) – (BEV0039)

Q: What can the UK learn from investment in other countries in the establishment of gigafactories?

a) The Economist on the effect of batteries on car manufacturing in the UK (31st Oct 2021):

b) “The stakes are high. This is thanks, in part, to the terms under which Britain left the EU. The rules-of-origin requirements in the withdrawal agreement mean that 40% of the components of cars exported to the EU must be of British or European origin. By 2027 this rises to 55%. Because the battery is such a large proportion of an electric vehicle’s cost, if Britain cannot build battery-manufacturing capacity, the resultant lack of access to the European market will mean it loses car manufacturers, which would be costly. The manufacturing of internal-combustion vehicles currently supports around 180,000 jobs.”

Benchmarking against what the EU is doing

c) Ref: February 2022 Questions and Answers: The European Battery Alliance: progress made and the way forward

https://ec.europa.eu/commission/presscorner/detail/en/QANDA_22_1257

d) For context: 2021 World Bank figs EU GDP $17.18tn, UK $3.13tn – so, everything else being equal, we should be doing 18.2% of what the EU is doing.

e) DIRECT QUOTES FROM ARTICLE ABOUT WHAT EU IS DOING AS OF FEB 22: (link above)

f) So far, 111 industrial battery projects are being developed across EU Member States, with some 20 battery cells Gigafactories. The total level of investment along the battery value chain amounted to €127 billion by 2021. Additional investment of some €382 billion is expected to create a self-sufficient battery industry by 2030. With this pace of investment, the annual added value created by the battery industry would be an estimated €625 billion by 2030.

g) In 2021, the Commission approved the second battery-related Important Project of Common European Interest (IPCEI), jointly notified by 12 Member States, with a total value of €12 billion. It complements the first battery-related IPCEI with a total value of €8.2 billion, which was adopted in 2019.

h) THIS IS HOW A PARALLEL ARTICLE FOR THE UK WOULD READ: just to keep up with the EU using 18.2% proportionality and current € / £ exchange rates:

i) So far, 20 industrial battery projects are being developed across the UK, with some 3 to 4 (3.6) battery cells Gigafactories. The total level of investment along the battery value chain amounted to £20 billion by 2021. Additional investment of some £61 billion is expected to create a self-sufficient battery industry by 2030. With this pace of investment, the added value created by the battery industry would be an estimated £100 billion p.a. by 2030.

j) In 2021, the UK approved the second battery-related project with a total value of £2 billion. It complements the first battery-related project with a total value of £1.3 billion, which was adopted in 2019.