US private equity giant Blackstone has recently announced that it has bought some property in Cambois, Northumberland, which investors had once expected would be used to build Britain’s first electric vehicle (EV) battery gigafactory.
Britishvolt, a UK lithium-ion battery manufacturing start-up, backed by mining heavyweight Glencore, was supposed to take over this particular piece of land, in order to build a £3.8 billion (€4.45 billion) gigafactory.
However, in January 2023, before the company could fulfil these ambitious plans, it went into administration. This led to over 200 employees being made redundant.
This was despite Britishvolt being in the process of being considered for a £100 million funding from the Automotive Transformation Fund. However, the company failed to meet the requisite goals for the funding, one of which was to start building the Cambois factory.
Following this collapse, the company had strived to organise a sale of the business or obtain extra rescue funding. This was after earlier cost-cutting attempts in November 2022, such as slashing employee pay did not have the desired results.
Blackstone, which has not revealed the exact amount of the deal, has said that it wants to build a data centre on this plot of land.
Regarding the deal, Northumberland County Council head councillor Glen Sanderson said that it could potentially spark a lot of jobs and growth in the area, which could revive the local community.
What does this mean for Britain’s net-zero plans?
The UK Brexit deal term dictates that a minimum of 70% of electric vehicle parts must be manufactured either in Europe or in Britain, for these vehicles to be allowed to sell in the EU. On the other hand, the UK government has also put a lid on new diesel or petrol cars being sold from 2030 onwards.
However, this land being taken over by Blackstone could mark the latest blow to Britain’s net-zero plans. This is because the kind of massive land needed to build a gigafactory on is diminishing.
Without Britishvolt’s expected factory, Envision, a Chinese company is the only EV battery maker left in the area. However, the UK has been taking several steps to reduce its dependence on China and Chinese-backed lithium battery makers, in the last few months.
This is because of worsening geopolitical tensions between China and the West, which could see shockwaves being felt in battery supply chains. Furthermore, China’s increasing hostilities with Taiwan also make it considerably risky to rely upon it for these key products.
Thus, both the UK and Europe need to take decisive steps to ramp up domestic EV battery production. This could be by offering incentives, such as cheaper land, tax breaks, increased funding and other opportunities for domestic manufacturers.
Darren Jones, chairman of the business, enterprise and industrial strategy (Beis) select committee said, as reported by The Telegraph: “The future of car manufacturing in the UK is dependent on our ability to make electric vehicle, and to be able to export them into the EU.”
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