Britain’s first gigaplant in Blyth will create 3,000 new jobs in the North East

The UK’s first gigaplant to manufacture cells for electric vehicle batteries is being built in Blyth, Northumberland. Construction will start next summer. This was confirmed today.

The company behind the country’s first cell production facility, Britishvolt, has – ironically – selected the vast former site of the Blyth coal-fired power station for the Gigaplant, which will create 3,000 new jobs in the northeast and another 5,000 in the wider supply chain.

When the company announced the plans, it released a rendered image of what the new facility might look like when it is completed by the end of 2026.

The company estimates that by 2028 it will produce around one billion cells – enough to power 300,000 lithium-ion batteries installed in electric cars – for the UK auto industry per year to attract vehicle manufacturers to manufacture in the UK.

Britishvolt confirmed in a statement Friday morning that it has acquired exclusive rights to the Blyth site, which is expected to produce world-class lithium-ion batteries by the end of 2023.

The £ 2.6 billion pledged for Gigaplant is the largest industrial investment in the Northeast since Nissan’s arrival in Sunderland in 1984 and one of the largest industrial investments in the UK.

In addition to being the fourth largest building in the UK, the site is also said to be the sixteenth largest in the world and the second largest existing gigaplant built by only Tesla’s Nevada facility.

Ironically, the Blyth power plant housed two coal-fired power plants that were eventually demolished in the early 2000s.

According to Britishvolt, up to 3,000 highly skilled people will be employed by the final phase of the project in 2027.

In addition, up to 5,000 jobs will be created across the broader supply chain, many of which will be on-site at the factory’s 135-acre site.

Britishvolt will also have a new headquarters – and possibly a research and development center – in the West Midlands. This could also generate up to 200 roles.

The company estimates it will produce 1 billion cells per year by 2028 to be used in batteries for electric cars, in an effort to attract vehicle manufacturers to set up a business in the UK

A UK gigaplant was described in Boris Johnson’s 10-point plan for a “green industrial revolution,” unveiled last month, with the goal of Britain being climate neutral by 2050

The gigaplant is widely seen as strategically important for the UK auto industry to maintain its competitive advantage as it moves towards an increasingly electrified future.

Isobel Sheldon, Chief Strategy Officer, told This is Money, “If you don’t have a battery manufacturing facility in the UK, there will be no new car factories coming into the UK.

Orral Nadjari, Managing Director of Britishvolt

‘A gigaplant is a requirement for the UK automotive industry to grow. Let’s stop losing manufacturers first and expand the sector here at a later date. ‘

The battery gigaplant is also one of the key pillars of Prime Minister Boris Johnson’s ten-point plan for the UK’s green recovery and an important step towards a net-zero economy by 2050.

Britishvolt bosses say they have had ongoing talks with the government asking for the Automotive Transformation Fund (ATF), which will provide £ 500m from next year.

‘We are pleased to have secured this location in Blyth. This is a tremendous moment for both Britishvolt and UK industry, ”said CEO Orral Nadjari when the news was announced on Friday.

‘Now we can really start the hard work and in just three years we can start making lithium-ion batteries for future electric vehicles.

‘It is vital for the UK auto industry and for the economy as a whole that we can move forward into the future. The earlier we start, the better. ‘

Britishvolt initially planned the plant in Bro Tathan, South Wales, but chose the Blyth site.

It’s the second blow to the automotive industry in a week after Wales.

It comes just days after British billionaire Sir Jim Ratcliffe announced that he had agreed to buy a former Mercedes-Benz car factory in France from next year to produce his Ineos Grenadier 4X4 in Bridgend,

The plant in Hambach, where smart cars are currently manufactured, is located near the German border and therefore offers EU-free trade connections for the vehicle brand of the petrochemical mogul throughout the EU.

His decision drew 500 potential new jobs from the region, which also includes the recently closed Ford engine plant.

Explaining Britishvolt’s decision not to open a store in Wales, Nadjari said: “Blyth meets all of our high standards and could be bespoke.

“It is on the doorstep of important transport links, easily accessible renewable energies and the possibility of a joint supply chain. This enables us to achieve our goal of making our Gigaplant the cleanest and most environmentally friendly battery system in the world.”

The giant system is mainly operated with renewable energies. The facility is located near offshore wind farms on the west coast but can also use hydropower generated in Norway and transmitted 447 miles under the North Sea.

Today’s announcement marks a second blow to Wales in the auto sector in a week’s time. Britishvolt selected Blyth instead of a location in Bro Tathan that same week. Sir Jim Ratcliffe’s Ineos Automotive company abandoned plans to build a vehicle factory in Bridgend in Hambach, France, after purchasing this former Mercedes plant

Britishvolt Q&A: why Northumberland, why ditch plans for Wales and what could a gigaplant mean for the UK auto industry?

This is Money sat down with Britishvolt’s Isobel Sheldon to learn about the nation’s first Gigaplant and the decisions that drove the company northeast …

This is money: what was the driving decision for choosing Blyth as the location for Gigaplant?

Isobel Sheldon: ‘The former power station is fallow land on flat land and the renewable raw material is already available. But Blyth also offers us enough space – and we need a lot of it.

“We need around 95 hectares for the plant alone. This will be the fourth tallest building in Britain, the sixteenth tallest in the world and the second largest gigaplant in existence, just behind the Tesla Nevada gigafactory.

‘However, we would also like to integrate the supply chains for materials and components on site. Therefore, we need access to around 120 hectares to make this possible. The site we have committed to purchase covers up to 135 hectares. ‘

TiM: Is it just a matter of reducing costs and avoiding import and export fees to bring the supply chain to the location?

IS: ‘Bringing the supply chain on board is of great importance as most of the material production processes currently take place in high carbon countries on their networks as they are very coal dependent. There is a significant carbon footprint in the supply chain here.

“By using them on site, we can run the processes with renewable energies in order to reduce the carbon content of the supply chain and get direct access to the materials at the cell production site.

“This will also help us control costs as these materials are currently being shipped through a number of companies in multiple countries and will generate a margin every time they do so.”

TiM: Were there any other advantages to setting up a manufacturing facility in the northeast?

IS: ‘There is an existing railway line that previously branched off into the power plant when it was in operation. This has been closed, but can be re-established so that products can be transported by rail.

“The deep water port is also just a mile from the facility so we could even use electric drayage trucks to bring materials to the facility so that the production element is also low carbon.”

TiM: Why would you choose Blyth instead of the Bro Tathan location in Wales that you originally intended?

IS: ‘The deal with Wales was to investigate the location and conduct our due diligence. We needed to know if there was anything that could no longer meet our timing goals.

This is Money who sat down with Isobel Sheldon, Chief Strategy Officer at Britishvolt, to learn more about the project

‘We looked at around 100 potential locations in the UK and examined 40. Realistically, only two are suitable for a facility of this size. Bro Tathan is one of them and the other is Blyth.

“Although we chose not to go to Bro Tathan, it was mainly due to schedules. It would have taken us about two years to start building the facility and that would have put us two years behind schedule.

“So we looked at the Northumberland site, which turned out to be much better.

“There are plenty of renewable energies in the immediate vicinity and there is access to deep water harbors without having to walk around the country.

“Every inland location won’t have the renewable energy, electrical infrastructure, or port access we needed. So it had to be near the coastal districts.”

“There just wasn’t enough space in Wales. There were places nearby but they couldn’t settle on the same piece of land.”

TiM: Does Blyth’s confirmation mean that the prospect of a Bro Tathan plant is completely dead?

IS: “We will keep our interest in the Bro Tathan site high. We know it’s a suitable location, but we also know it will be at least two years before we can even consider building there.

“We won’t need the capacity for a second Gigaplant in the UK for the next two years, so this remains a viable option.”

TiM: What investment will the government and Boris Johnson’s Ten Point Revolution in Green Industry make?

IS: “We have had a lot of discussions with the government. Of the £ 1 billion promised, £ 500 million will be available next year.

‘We submitted an application to the Automotive Transformation Fund. However, as with any government funded program, there is a process that requires you to tick a box before you can talk about numbers. However, we are in a leading position to access these ATF funding streams. ‘

TiM: With the plans for Tesla’s Berlin-based gigafactory going ahead, do you see a competition for battery manufacturing in the UK?

IS: “We don’t know of any other applicants for Gigaplant status, but that doesn’t mean there aren’t any potential competitors.”

“Given that we have only turned down the only other site in the country suitable for a facility due to lack of time and have already secured the only other site in the UK, we believe we are in a strong position.”

A look at the Tesla Gigafactory construction site in Grünheide near Berlin earlier this week

A German court has ruled that the automaker Tesla no longer has to fell trees at the site where it is building its first electric car factory in Europe

TiM: China is undoubtedly a stronghold in the electric battery market. How do you fight that?

IS: ‘We see our competition in Europe, not in China. This is because shipping batteries halfway around the world is unsustainable.

‘If the demand for electric vehicles increases, 750,000 vehicles will soon be produced in Europe. If they all use batteries imported from China, then you have around $ 1 billion worth of batteries on the water at any given time. That’s just not feasible. So we need to localize the manufacture of batteries in Europe and the UK.

“You also have to take into account that China’s electricity grid is around 80 percent dependent on coal and the local air quality there is horrific. If we continue to import Chinese-made products for an environmentally friendly industry, we are only exporting our carbon problem to another location.”

TiM: How worrisome is Brexit, especially if we are in a no-deal situation on December 31st?

IS: “Most of the imported raw materials we use will come from non-EU countries. As for the import tariff, that doesn’t bother us too much at all – assuming we sign free trade agreements with the countries that will of course supply the parts.

‘In fact, a hard Brexit would strengthen our domestic business model here in the UK. We have to be the setback for the automotive industry. If you can’t build batteries near where you build vehicles, the industry will migrate to other countries. “

TiM: How do the cells for EV batteries compare with those that are already on the market?

IS: ‘All of our competitors – LG Chem, Samsung, Northvolt – do the same. They make their cells available to manufacturers based on their costs and technical data. It’s a standard solution.

“That’s fine for small, relatively inexpensive cars because you want the lowest possible cost and not worry too much about range or performance goals.”

“Around 30 percent of the vehicles manufactured in Europe are premium models – in Great Britain it is around 70 percent. If you have luxury vehicles that weigh around two tons, you cannot use the same battery that you installed in a Renault Zoe, for example.

‘This is a big problem in the growing market. This is because the premium brands need more technology to compete with Tesla – and now they can’t.

‘We are striving for a capacity increase that will enable the premium sector to compete – if not beat – Tesla so that competing car brands can finally combine quality with performance while keeping costs competitive. This gives us market attractiveness across Europe.

“If we can increase battery performance by up to 30 percent, a tariff of five percent suddenly no longer appears to be a big problem for European manufacturers.” But of course we all want an agreement at the end of the day that gives us free access to the European Union. ‘

Britishvolt said its plans include a recycling center where batteries from electric cars can be broken down at the end of the cycle and 30% of their materials can be reused to make cells

TiM: Will there be capacity in the new Gigaplant to recycle older car batteries?

IS: ‘Another element of the common supply chain is that we can introduce the ability to recycle and recover battery materials that can be fed back directly into the active manufacturing process.

‘There has been a longer than expected delay in getting EV batteries back from the market. This is simply because they last longer than many people originally thought.

“If you set up a recycling center now to take up to 30,000 tons of used batteries, this will no longer be possible for another ten years because not enough raw materials will come back as the batteries are still used in vehicles on the road.

“You also need to consider the second-life uses of batteries, such as: B. use in storage units or backup generators. In these cases, the batteries will not return for 16 or 17 years.

‘If we have enough raw materials to make the recycling process profitable from a business point of view, we will have our own center on site. This will be around 2027 and 2029, depending on what the raw material situation looks like. ‘

TiM: How do you recycle batteries? And how much of an old battery can be reused?

IS: “The current recycling process is to heat the battery to an extremely high temperature, creating a black mass of alloy metals.

However, the much more environmentally friendly method is to use a lower temperature to separate and reclaim the materials. Around 30 percent of the materials can be recycled and fed back into the manufacturing process for new cells. ‘

TiM: Will the British Gigaplant only produce cells for car batteries?

IS: ‘No.

“Most of the time, passengers sit in a driveway or in an office parking lot and are not driven all the time. On average, the owners only use around 25 to 30 percent of the available battery capacity per day.

“However, buses and trucks spend around 80 percent of the time in use, which is a particular problem because the battery doesn’t last six or seven years at this operating level.

‘At Britishvolt, as well as for car-specific cells, we have examined the entirety of all applications for heavy-duty vehicles and found that the market demand is sufficient to make the production of a cell specially designed for these types of vehicles economically with the service life they need to make their business models viable. ‘