The Britishvolt gigafactory collapse

Alan Thornett writing on the recent collapse of the start-up Britishvolt

 

The recent collapse of Britishvolt’s £3.8 billion lithium-ion electric car (EV) battery gigafactory in Blyth, Northumberland, is an existential threat to both the future of car making in Britain and the transition to green energy and zero carbon.

Revolution

The Britishvolt initiative was promoted by Boris Johnson, who put £100 million of government money into the plant in 2021 as a part of his “green industrial revolution” and his bogus “levelling up” agenda. It was also in one of the “red wall” seats that had gone to the Tories at the last general election. As Johnson tweeted at the time: “Fantastic news that EV pioneer Britishvolt will build a gigafactory in Northumberland, creating thousands of jobs in our industrial heartlands and boosting electric vehicle production as a part of our Green Industrial Revolution.”

The plant was designed to produce 100,000 batteries a year but collapsed before production had even started. The first batteries had been due to come off the production line by 2024 and full production reached by 2028. Work was halted, however, in August 2022 when the project ran out of money. The 300 workers already employed at the plant were sacked following the announcement.

The Blyth site was chosen due to its proximity to one of NISSAN’s largest car plants in Sunderland, Tyne and Wear, which employs 6,000 people and manufactures the Nissan Qashqai.

Collapse

Although the collapse did not come as a surprise since it was underfunded from the outset, it comes at a time when car manufacturing in Britain has semi-collapsed and is facing a possible wipeout. The industry is a shadow of its former self, and what is left is owned entirely by foreign multi-nationals. Last year, its production was the lowest for 66 years.

There are two principal reasons for the demise of the UK car industry.

The first is Brexit, which robbed it of its tariff-free entry into the EU single market, which by that time was its principal rationale for existence. It also added reams of export and import paperwork that is incompatible with vehicles criss-crossing Europe as a part of just-in-time production models.

The Honda plant in Swindon announced its closure soon after the Brexit vote. Even Nissan, with a major investment in Sunderland, would have relocated after the Brexit vote had it not received special backdoor assurances from Downing Street. In 2027, under the UK-EU trade deal that Johnson negotiated, all EVs entering the EU will have to have batteries that were made in either the UK or the EU. This will make the Brexit issue even more important.

The second is the UK’s disastrous response to the speed of the EV revolution, which has exceeded all expectations, and which has put the plans to end the production of new internal combustion engines (ICEs) by 2030 in Britain and by 2035 in the EU and the USA within reach

The industry research analyst EY has just published the following remarkable figures:

“Electric vehicle sales in the US, China, and Europe will outpace all other engines three years sooner than previously expected.”

The latest predictions show that by 2027, EV sales in Europe will surpass those of other powertrains (or energy sources), a trend that will be repeated in both China and the US by 2032.

For Europe and China, this is one year faster than previously expected, and for the US, it is four years faster:

”Their analysis also shows that by 2040, ICE vehicle sales will shrink to less than 1% of global sales, five years faster than previously expected.”

What next?

Against this backdrop, the UK government has completely failed to plan for the type of battery capacity required to support a viable EV manufacturing industry in the country. All that currently exists is a small, Chinese-owned battery plant in Sunderland that produces batteries for the Nissan Leaf.

David Bailey, a professor of business economics at the Birmingham Business School and an impressive authority on this subject, has concluded that a viable EV manufacturing capacity in this country requires the construction of eight gigafactories of the same size as the one that just collapsed.

Also, any viable EV production capacity must be based on locally made batteries, because the weight of an EV battery makes long supply chains either too expensive or too bad for the environment. In fact, the location of the battery manufacturing plants today determines the location of the assembly plants rather than the other way around. It is not impossible to produce EVs without locally sourced batteries, but it is second-best and probably temporary.

In fact, the race is on to establish the battery manufacturing capacity that will be needed. It is a global scramble for future dominance of the automotive industry during the transition from ICE to electric power and under conditions where Britain has yet to locate the starting blocks.

There are already 40 gigafactories either in production or being built in the EU, while the USA has five plants in production, 12 more in the pipeline, and another 20 planned by 2030. China, which is already the global battery superpower, is now building a new battery gigafactory every week, and the USA is building one every four months.

Six battery manufacturers dominate the global lithium-ion EV battery market. These are the Chinese companies BYD and CATL, the Dutch/American company LG Chem, the Japanese companies Panasonic and Samsun, and the South Korean company SK Innovation. They accounted for approximately 87% of the global battery capacity in 2021. CATL is by far the biggest and will manufacture a third of the world’s EV batteries in 2022, supplying them to Tesla, Peugeot, Hyundai, Honda, BMW, Toyota, Volkswagen, and Volvo.

The BMW plant in Cowley, which currently produces 40,000 electric Minis a year alongside petrol-powered cars with batteries sourced from Dingolfing in Germany, has announced that the electric Model will be switched to China by the end of this year. Even though BMW has said that the petrol version will still be made in Cowley, the fact that petrol-powered cars will no longer be made after 2030 makes any promise meaningless.

Why does this matter?

All this matters, first and foremost, because a strong and viable lithium-ion EV battery manufacturing capacity is crucial if we are to have the fully decarbonised, publicly owned transportation sector that we need for the future. Multiple forms of electricity storage, including batteries, are also the cornerstone of a fully decarbonised economy.

It is important that the UK has a viable EV production capability, and we should insist that it does. Transport accounts for around 30% of global CO2 emissions, and 72% of these emissions come from road vehicles—cars, vans, lorries, and buses.

Fortunately, it is also the easiest of all the major carbon-emitting sectors of the global economy to decarbonise, since its obvious replacement, electric power, is a tried and tested alternative energy source that has been suppressed, for the whole of the 20th century, by the oil lobby. It has long been the low-hanging fruit of carbon reduction, and it offers the biggest CO2 reduction in the shortest time available to us on the planet.

Our aim, however, must not be the replacement of the current global fleet of fossil fuel-powered vehicles with a similar number of EVs. Two things are necessary. First, we need a major reduction in passenger cars worldwide and big changes in the way they are used. Secondly, fossil fuel cars and other forms of carbon-driven transportation must be completely phased out and replaced by 100 percent electric vehicles.

Some cars and vans will still be necessary, of course, for the foreseeable future, but they need to be smaller (i.e., with a drastic cut in SUVs), powered by electricity, and collectively rather than privately owned. The key to this is a comprehensive system of free, safe, and reliable public transport at every level—cities, towns, and intercity. The current car culture needs to be challenged and a culture of collectivised transportation promoted.

The World Health Organisation, moreover, has long identified the internal combustion engine (ICE) as the single biggest environmental outdoor health risk in the world, contributing to 3.7m deaths a year.

The advantages of EVs are already clear. They already emit far less CO2 than fossil fuel vehicles, which will be further improved once the national grid is decarbonised. They emit far less roadside pollution, and they are simpler to manufacture and maintain than IEC vehicles. They last longer and cost less to maintain and fuel than petrol or diesel cars.



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Alan is the author of Facing the Apocalypse – Arguments for Ecosocialism which can be purchased from Resistance Books.


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