Analysis: How Britain's first gigafactory will change the industry

British car makers are already in talks with new start-up Britishvolt to source EV batteries from its UK gigafactory, which is planned to open in 2023.

The company, which was founded only late last year, said confidence from the industry in its plans has grown following its commitment to a site in South Wales, including obtaining the relevant planning permissions.

Britishvolt chairman Lars Carlstrom said: “Car manufacturers understand the importance of batteries that are locally produced. It has taken some time to bring confidence. People need to see we’re investing money and are intending to do this, that it’s not just something we say we’re going to do.

“Now we’re deploying a workforce to build the factory and getting planning permissions, we’ve seen greater interest. We’re now in talks with a number of British makers. We’re also talking with some of them about developing [bespoke] batteries to fit their products, as part of their development team.”

The upcoming gigafactory, billed to be the UK’s first, is a 2.7-million-square-feet site at a former RAF base in Bro Tathan, Wales – closely situated to Aston Martin’s new St Athan factory, home of the DBX SUV and its future electrified cars. It’s planned to open with an annual output of 10GWh – enough for 130,000 EVs – and hit 30GWh by 2027, eventually creating up to 4000 jobs.

So far, all investment has come from Britishvolt itself, although it’s relying on government support as well.

“Full planning permission is out of our pockets,” Carlstrom said. “We’ve had no support or funding so far. We’re quite sure we will have funding from the UK government up to a certain extent; we need to negotiate how much, of course.”

Britishvolt’s 10GWh factory is expected to cost £1.2 billion, with another £1.4bn required to reach its full 30GWh capacity. A gigafactory has long been seen as vital for the survival of Britain’s automotive industry. Last year, Jaguar Land Rover’s outgoing CEO, Ralf Speth, said: “If batteries go out of the UK, then automotive production will go out of the UK.”

More recently, Mike Hawes, the head of the Society of Motor Manufacturers and Traders, said during an Autocar Business Live online interview: “The key thing we need is a battery plant. Without that, we’re going to be in trouble.”

The government has also voiced its support. So far, it has invested £128m in battery-related development including the UK Battery Industrialisation Centre, saying it would “provide a stepping stone for our ambition for a gigafactory in the UK”.

Other than Britishvolt, the only name associated with a possible UK gigafactory recently is a very obvious one: Tesla. Back in June, there were reports suggesting that the American firm was evaluating a potential location in Somerset.