Britain trails behind in key technology battle

During his first speech as prime minister on the steps of 10 Downing Street last month, Boris Johnson said the UK was “leading the world in the battery technology” to cut carbon emissions and tackle climate change.

The reality, however, is less compelling than Mr Johnson’s statement. While UK universities have a strong record in battery research, Britain is far behind in manufacturing.

It has less than a 1 per cent global share of manufacturing of lithium-ion batteries, the dominant technology for electric cars that is also increasingly needed for energy storage, according to Wood Mackenzie, a research and consulting firm.

Milan Thakore, analyst at Wood Mackenzie, questioned Mr Johnson’s assertion that the UK is leading the way in battery technology.

“Emphasis needs to be put on how far behind the UK is in terms of battery manufacturing and not pretend we have any substantial position in this battery race,” he said.

Lithium batteries chart

Britain risks seeing carmakers with UK operations shift production elsewhere in the future to be closer to large supplies of cheap batteries for their electric vehicles, experts have warned.

The Faraday Institution, a British research body promoting electrical storage technology, said that without a concerted, government-backed push into batteries and electric cars, about 114,000 jobs in the UK motor industry could be lost by 2040.

“There is a risk that car manufacturing and battery manufacturing will have a tendency to co-locate,” said Neil Morris, chief executive of Faraday, which has pledged to invest £78m in battery research.

“The risks to the UK if that occurs and the batteries are not being made here is you may see some shift of car manufacturing away from the UK and consequent job losses.”

The British car industry enjoyed a renaissance from the 1980s as overseas companies led by Nissan opened factories, but investment in the sector has been falling sharply amid Brexit uncertainty. Honda in February announced plans to close its Swindon factory which makes the Civic car, and Ford said in June it would shut its Bridgend plant that manufactures engines.

With current generation carmaking running into difficulties, Britain also does not have concrete plans for one large battery “gigafactory” — the term for large lithium-ion battery factories such as the one built by Tesla Motors in the US to power its electric vehicles.

Mr Morris said Britain will need between four and 13 high-volume lithium-ion factories by 2040 to meet expected demand for electric cars.

Carmakers with UK operations are talking to Asian battery makers about investing in the country but the uncertainty of Brexit “is not helpful”, he added.

“Demand is definitely coming and the UK could support a gigafactory,” said Mr Morris. “What that requires is one of the [carmakers] to do a deal with a [battery] cell manufacturer and that cell manufacturer to decide to locate in the UK.”

As well as becoming the leading technology for electric cars, lithium-ion batteries are also being used to store energy, notably from renewable power such as wind and solar.

The batteries serve as an important source of back-up power. Following the blackout affecting almost 1m UK homes and businesses this month, 475 megawatts of battery power was used to help restore electricity supplies, according to National Grid, the company responsible for the country’s energy transmission infrastructure.

Lithium-ion batteries were developed in 1980 at Oxford university, but they were first commercialised by Japan’s Sony in 1991, for use in their camcorders.

Anil Srivastava, chief executive of Swiss battery maker Leclanché, said the UK needs to focus on how to commercialise innovations made in its universities and then scale them up quickly. Leclanche has a joint-venture agreement with Warwick university to try to spin out battery research breakthroughs.

“There’s a yawning gap between what works in the lab in university and what it takes to industrialise,” added Mr Srivastava.

Asian countries, led by China, today dominate global production of lithium-ion batteries, with an 80 per cent market share, according to Wood Mackenzie.

It estimates that Asia’s share will drop to 78 per cent by 2025, while Europe, excluding the UK, will increase from 4 per cent now to 15 per cent. Britain’s share in 2025 will be 0.25 per cent, Wood Mackenzie calculates.

“Frankly, if you compare what is going on in China — the focused and huge investment that has gone into this sector — we are clearly well behind,” said Nicholas Beatty, co-founder and director of Zenobe Energy, a UK operator of battery storage facilities.

“There are small programmes in terms of investment and support that the [UK] government gives . . . But if you put [this] alongside what is happening in China, it is really very insignificant. It’s not just the UK, it is Europe as well.”

Still, some battery companies see Brexit as an opportunity to bolster British manufacturing, thereby improving the country’s energy security and its efforts to reduce carbon emissions.

“Brexit means batteries,” said Simon Daniel, chief executive of Moixa, a UK company that develops software to integrate batteries into power grids. “We need more of that because it is about taking back control of energy, keeping energy costs low, keeping energy local and the only way to do that in the renewable economy is to have batteries.”

The UK department for business said it was “supporting the development of new battery technologies with a multimillion pound investment in research, including in a dedicated centre that provides a stepping stone towards the UK’s first-ever gigafactory”.


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