Battery forecast demand increases and new supply chain opportunities lead the way for UK outlook 

The Advanced Propulsion Centre UK’s latest Demand Report highlights the exciting emerging trends and opportunities for the UK to lead the way in materials demand, and motor design.

• • Increased demand from battery electric vehicle (BEV) passenger cars pushes 2030 demand up to 90 GWh (from 89 GWh previous quarter)
  • Increase in 2027 battery demand from 37 GWh to 40 GWh
  • Overall, 2030 electrified vehicle ( xEV)¹ production reduced from 1.3 to 1.2 million – reductions in ICE-led and plug-in hybrid electric vehicles (PHEV)
  • Manufacturers looking to reduce electric vehicle costs triggered by perceived threat from China
  • Meeting the current timeline for EU rules of origin continues to be a key challenge for UK-based BEV manufacturers
  • Previous forecast of 2906 GWh by 2030 
  • Global battery demand by 2030 remains high US and China lead demand while Europe and UK battery demand forecast is lowered, due to the impact from US Inflation Reduction Act, and shifting some vehicle models launches to after 2030 
  • Europe demand forecast lowered by 100 GWh, UK by 7 GWh in 2030 
  • Supply chain issues begin to ease but benefit will not be seen as quickly in the UK compared to Asia and US 
  • Industry shift to an increase in fuel cell electric vehicles (FCEV) impacts Platinum demand 

28 September 2023

An increase in battery demand, along with an industry-wide desire to de-risk the supply chain of rare earth elements depict a positive future outlook for the UK automotive sector detailed in the Advanced Propulsion Centre UK’s (APC) latest Quarterly Demand Report (quarter 2 2023).

Battery demand has seen an increase since the Q1 report, with the UK forecast for BEV passenger cars pushing 2030 estimates to 90 GWh, up from 89 GWh during the previous quarter. There has also been a predicted increase to the 2027 outlook, with market need rising from 37 GWh to 40 GWh.

Speaking of the changes in projections over the previous three months, Dr Chris Jones, Strategic Trends Manager, APC, said:

A lot has happened since the publication of the Q1 2023 report. Jaguar Land Rover has announced more than £15 billion in investment in the UK over the next five years, with £4 billion committed by Tata to build a new gigafactory in the UK, and BMW Mini has announced a £600 million investment in its Cowley plant too. The UK offers an extremely competitive landscape for investment in the full research, development, and manufacturing ecosystem for electric vehicle technologies and this has been recognised by these investments. The commitment from Tata and BMW Mini helps to further strengthen and grow supply chains in the UK, putting the UK in a very competitive position.

Dr Hadi Moztarzadeh, Head of Technology Trends at APC commented:

European manufacturers are trying to reduce electric vehicle costs triggered by perceived threat from Chinese manufacturers. Tesla is already producing cars with Lithium-Iron-Phosphate (LFP) batteries and is expected to shift to ferrite magnet motors to reduce costs and increase supply chain stability. This will be an interesting space to watch as Europe is looking to implement policies to decrease the risk of Chinese vehicles taking a large share of the European market. On the other hand, we all realise the importance of a cost-competitive market to deliver affordable electric vehicles. In France, for example, new incentives will be rolled out in January aiming to support French and European car makers over Chinese rivals.

The new ‘green score’ system being implemented in France will factor in six fresh CO2 emission variables, accounting for emissions from steel and aluminium production, usage of vital raw materials in the car’s structure and battery, and the logistics of transporting the car to its final destination. Overall, the six factors will rule out Chinese imports from receiving this 5,000-euro incentive.

The report also provides insight into the demand for battery components, particularly Cathode Active Material (CAM) in Europe, and how incentives from Canada and the USA are leading to an increased deficit in supply in Europe.

APC Quarterly Demand Reports track trends in the automotive industry with forecasting based on extensive industry-led research. APC is the organisation tasked by the UK government and automotive industry to accelerate the transition to zero tailpipe emission vehicle solutions. It uses its unique awareness, gained from working closely with the global automotive industry, to provide insight and forecasting to support government with strategic policy decisions and to provide clarity to the industry about the projected demand, product, and technology roadmaps.

¹ xEV refers to all vehicles with a battery: mild hybrid, full hybrid, plug-in hybrid, battery electric vehicle, fuel cell electric vehicle. ICE-only vehicles are excluded.