“Exciting times for UK automotive” as investment influx provides timely jolt of confidence for UK Battery Electric Vehicle forecast       

Recent announcements by Nissan and BMW Mini, coupled with positive impacts from the ZEV mandate, have helped generate a welcome boost to the UK Battery Electric Vehicles (BEVs) industry, providing increased confidence in the sector and a rise in BEV (Battery Electric Vehicle) demand to 2027, as detailed in the latest Quarterly Demand Report (Q3) from the Advanced Propulsion Centre UK (APC), which highlights some of the reasons behind the 4 GWh (gigawatt hours) rise in the forecast.

Dr Hadi Moztarzadeh, Head of Technology Trends, APC, said:

We are starting to see the impact of the ZEV mandate in production plans and investment in the UK, alongside OEM strategy announcements for electrification. This is moving the UK automotive sector to a higher percentage of zero-emission vehicles faster than we are seeing in many other countries.

Much of the increased confidence in the sector comes on the heels of Nissan’s decision to produce three new BEV models in the UK, as well as a commitment to building a new gigafactory in Sunderland, which will comprise an estimated £3 billion investment in total.

“Nissan’s recent announcement of investment in the UK is welcome news, which followed BMW’s investment in electric Minis, and JLR’s gigafactory commitment. These announcements combined with Government’s Advanced Manufacturing Plan and the UK Battery Strategy will encourage other companies to look at the opportunities here. No doubt there are challenges ahead, but it is a really exciting time for the industry and these announcements show the UK can meet those challenges and support the industry and the broader global ecosystem through the transition to net zero,” continued Dr Moztarzadeh.

This latest quarterly report highlights, the opportunities for the UK to localise the lithium supply chain, boosting jobs, and potentially reducing environmental impact too. The UK has both hard rock and geothermal brine sources of lithium, and current forecast domestic supply is 46.5 kt of Lithium Carbonate Equivalent (LCE) compared to a demand of 64 kt. A number of companies, many of whom have received funding from the APC, are involved at varying stages in the lithium extraction process, and there is time for new projects to come online, and for faster scale-up, with appropriate support, in order for the UK to meet the stated forecast.

Dr Chris Jones, Strategic Trends Manager, APC, explained:

“As covered in our recent Automotive Battery Value Chains report, there are clear demand signals from automotive OEMs for Lithium Iron Phosphate (LFP) batteries. Currently, Nickel Manganese Cobalt (NMC) chemistry dominates the automotive battery market and from an investment point of view, you have access to a larger market if you are part of the NMC supply chain. So, despite those signals, the investment has been in setting up the NMC battery supply chain and less has been happening around LFP chemistry.”

Dr Jones added:

Lithium is a critical material for both NMC and LFP chemistries. So, we looked at global lithium supply chain, including lithium extraction and upstream side, and the UK has some rich sources of lithium, in particular in brines, but also in granite deposits. The UK has many advantages that make it an attractive place to process material – for example we have Green Lithium, Leverton Lithium and Tees Valley Lithium looking to process lithium for batteries. Not only could these facilities service the UK market, but they could also supply non-domestic markets with a low- or zero-carbon battery grade lithium supply.

Alongside this there is innovation in extraction methods, working alongside these projects, which can improve the efficiency and reduce the environmental impact of lithium. These processes are useful here in the UK but can also be exported globally to improve the global supply chain.