The race is on to power up the UK’S fu­ture in elec­tric cars

As the UK, and the world, get ready to ramp up bat­tery pro­duc­tion, re­search will be key, says Hasan Chowd­hury

The Sunday Telegraph - Money & Business - - Front page -

Har­javalta, a sleepy town off the Baltic coast in south-west Fin­land, has seen lit­tle change to its flat ter­rains, vast pine forests and steady smelt­ing sec­tor for decades. That, how­ever, could be about to change. In just a few years the 7,000 or so res­i­dents of the re­mote re­gion will wit­ness an in­dus­trial trans­for­ma­tion. Ger­man chem­i­cals gi­ant BASF this week an­nounced plans to build a bat­tery plant in Har­javalta as part of a £360m ven­ture. The fa­cil­ity will sup­ply bat­ter­ies to 300,000 elec­tric ve­hi­cles a year in Europe once pro­duc­tion be­gins in 2020.

Elec­tric cars make up only a tiny per­cent­age of an­nual ve­hi­cle sales, but a sud­den change in for­tunes for Tesla could mean mass adop­tion of the cars – and a spike in de­mand for bat­ter­ies – ar­rives sooner than ex­pected.

Elon Musk’s com­pany has been marred by pro­duc­tion woes for its en­try-level Model 3 elec­tric ve­hi­cles this year. How­ever, the firm an­nounced the largest profit in the com­pany’s his­tory last Wed­nes­day. Rev­enues dou­bled from the same pe­riod in 2017 to £5.3bn – thanks in large part to Model 3 de­liv­er­ies out­per­form­ing ex­pec­ta­tions.

With an in­creas­ing num­ber of man­u­fac­tur­ers like Volk­swa­gen, BMW and Nio, a Chi­nese car­maker, all turn­ing their hand to elec­tri­fi­ca­tion, an in­ter­na­tional race is un­der way to build a bat­tery-man­u­fac­tur­ing in­dus­try to power elec­tric ve­hi­cles. The fu­ture of the UK’S au­to­mo­tive sec­tor hinges on its abil­ity to keep up.

“Peo­ple are mak­ing de­ci­sions now about where to lo­cate bat­tery man­u­fac­tur­ing for elec­tric ve­hi­cles,” says Neil Mor­ris, chief ex­ec­u­tive at The Fara­day In­sti­tu­tion, an in­de­pen­dent in­sti­tute for en­er­gys­tor­age science and tech­nol­ogy.

The or­gan­i­sa­tion, based in Har­well, Ox­ford­shire, is ready to stand up to com­pe­ti­tion from the likes of BASF. Har­well is the birth­place of the UK’S nu­clear in­dus­try and is spear­head­ing the coun­try’s “bat­tery rev­o­lu­tion”. The body was es­tab­lished in 2017 as part of the Gov­ern­ment’s £246m in­vest­ment into the Fara­day bat­tery chal­lenge, an ini­tia­tive aimed at over­com­ing cur­rent tech­no­log­i­cal short­com­ings.

Im­prove­ments in bat­tery life, en­ergy den­sity and ef­fi­ciency are just some of the ar­eas iden­ti­fied by the re­search hub as re­quir­ing at­ten­tion if the UK is to take a lead in a bat­tery mar­ket es­ti­mated to be worth £5bn by 2025 and £50bn to Europe.

The make-up of a bat­tery is com­plex. Lithium-ion ver­sions, the most com­mon form cur­rently found in elec­tric ve­hi­cles, con­sist of mul­ti­ple mod­ules hold­ing cells, the small­est unit of a bat­tery. The cells con­tain a highly flammable liq­uid elec­trolyte that car­ries the charge be­tween elec­trodes, as well as a va­ri­ety of met­als such as cobalt and nickel, for which prices have soared as de­mand surges for bat­ter­ies.

The Fara­day In­sti­tu­tion sees the need to scale bat­ter­ies quickly, but is ready to change the sta­tus quo and get the tech­nol­ogy right to meet fu­ture needs. One key area it is look­ing at is ex­tend­ing bat­tery life.

As part of a project led by the Univer­sity of Cam­bridge, the In­sti­tu­tion is ex­am­in­ing how stresses such as high tem­per­a­tures and charg­ing rates dam­age bat­ter­ies over time. By un­der­stand­ing these com­plex pro­cesses, it can start to ac­cel­er­ate the de­vel­op­ment of new chemistries that can keep them go­ing for hun­dreds of miles, do­ing away with range anx­i­ety – a phe­nom­e­non de­scrib­ing the fear that a car will not reach its des­ti­na­tion be­cause it has run out of power.

The in­sti­tu­tion is also look­ing at more ex­per­i­men­tal ar­eas. The mod­el­ling of bat­ter­ies, all the way from the atomic level to the de­sign of the pack­age, can re­veal ways of in­flu­enc­ing per­for­mance.

“Part of our remit is to help move those break­throughs into com­mer­cial­i­sa­tion,” says Mor­ris.

But one ma­jor stum­bling block is a skills short­age. The UK will need to re­train the thou­sands of peo­ple skilled in the man­u­fac­ture of in­ter­nal com­bus­tion en­gine ve­hi­cles if it hopes to one day build an in­dus­try that can com­pete glob­ally.

Tech­ni­cians, engi­neers and re­search sci­en­tists will be needed in abun­dance to cre­ate ef­fec­tive pro­duc­tion lines to sup­port the gi­gafac­to­ries of the fu­ture, and Mor­ris sees nu­mer­ous op­por­tu­ni­ties to re­train work­forces stuck in the sys­tems of the past.

When firms are de­cid­ing where to place plants, they will be care­fully ob­serv­ing the de­mand for bat­ter­ies lo­cally, which he says “is code for ‘how much car man­u­fac­tur­ing is there?’” given the prac­ti­cal ben­e­fits of lo­cat­ing the two to­gether.

“The UK is in a good po­si­tion in terms of the num­ber of cars we cur­rently make. Quite a num­ber of those get ex­ported into Europe, so this is a ma­jor in­dus­try,” he says.

The Gov­ern­ment recog­nises the need to in­vest in bat­tery re­search, and can see the UK be­ing ready to lead in­no­va­tion. It says bat­tery tech­nol­ogy is at the heart of its in­dus­trial strat­egy. The Depart­ment for Busi­ness has pledged £246m over four years for re­search and de­vel­op­ment.

How­ever, the global com­pe­ti­tion is fierce.

Bel­gian min­ing com­pany Umi­core is gear­ing up to in­vest more than £290m in a bat­tery plant in Poland, while BASF’S in­tent to take bat­tery man­u­fac­tur­ing se­ri­ously is clear, with its fa­cil­ity set to ap­pear in Har­javalta next to a cobalt and nickel re­fin­ery owned by No­rilsk Nickel, the Rus­sian min­ing gi­ant.

BASF’S strate­gic de­ci­sion to lo­cate next to the re­fin­ery en­sures ac­cess to a steady stream of com­modi­ties, which will only be­come more valu­able as the world shifts gear to elec­tric ve­hi­cles.

Ger­man car­maker Daim­ler is build­ing a bat­tery plant in Ka­menz, while North­volt, a Swedish bat­tery com­pany led by for­mer Tesla ex­ec­u­tives Pe­ter Carls­son and Paolo Cer­ruti, is throw­ing £3.6bn at a fa­cil­ity in Swe­den as part of a tie-up with Siemens, truck maker Sca­nia and ABB, the Swiss en­gi­neer.

While Europe is in­vest­ing huge amounts in bat­tery fa­cil­i­ties, it is a long way be­hind the Far East in man­u­fac­tur­ing. The likes of China and South Korea have stolen a march on their Euro­pean ri­vals, and are boost­ing pro­duc­tion with such pace that the re­gion is primed to be the main sup­plier of the world’s most af­ford­able bat­ter­ies. Build Your Dreams (BYD), aS henzh en head quar­tered car man­u­fac­turer from China, op­er­ates three lithium-ion bat­tery fa­cil­i­ties in the coun­try, while LG Chem, based in Seoul, is mak­ing it­self known with fac­to­ries in China and is ag­gres­sively push­ing pro­duc­tion in lo­ca­tions as far flung as Poland.

BYD’S third fa­cil­ity, which opened in China’s Qing­hai prov­ince in June with a 24GWH ca­pac­ity, will be the world’s largest once con­struc­tion is com­plete. It is plan­ning a 60GWH ca­pac­ity for the fa­cil­ity by 2020. By con­trast, the UK’S only bat­tery plant in Sun­der­land pro­duces 2GWH of lithium-ion bat­ter­ies per year.

The pro­duc­tion pow­er­houses of the East may be push­ing down the prices of bat­ter­ies, but ac­cord­ing to Colin Her­ron, the manag­ing di­rec­tor of con­sul­tancy Zero Car­bon Fu­tures, there is great in­cen­tive for the UK to build its own. “The big chal­lenge is sim­ply trans­port­ing what is the equiv­a­lent of a quar­ter of a ton of con­tent from China to the UK on an on­go­ing ba­sis. Even if it’s not the whole bat­tery pack, even if it’s just the mod­ules, it’s a pretty weighty thing,” he says.

“The other point I’m sure the Amer­i­cans will be [alert to] is that the trans­port sys­tems of the West are 100pc re­liant on China. I think Ger­many’s wak­ing up with the cam­paign to get bat­ter­ies up and run­ning in Europe.”

Much of the UK’S abil­ity to at­tract man­u­fac­tur­ers glob­ally will de­pend on the qual­ity of its re­search, as Her­ron says there would be lit­tle use in com­pet­ing against China on pro­duc­tion num­bers alone. But the clock is tick­ing and the UK risks be­ing an unattrac­tive prospect. Sir James Dyson said last week that he would be es­tab­lish­ing a man­u­fac­tur­ing base for his elec­tric ve­hi­cles in Sin­ga­pore in­stead of the UK. Dyson’s elec­tric ve­hi­cles, due for launch in 2021, could run on solid-state bat­ter­ies, a new type with fewer haz­ardous risks – and one the Fara­day In­sti­tu­tion is look­ing at with ur­gency.

“There is a tech risk if some­one gets solid state be­fore we do,” says Mor­ris.

De­spite an ur­gency to build plants in the UK, much more will need to be done to catch up with global com­peti­tors.

“I think the Fara­day Bat­tery Chal­lenge it­self shows a strong com­mit­ment from the Gov­ern­ment, but that in it­self will not guar­an­tee the in­vest­ment will come here,” says Mor­ris.

Her­ron, how­ever, re­mains scep­ti­cal about how quickly things will move, and thinks car­mak­ers are some way off the an­nual vol­umes re­quired to see lots of elec­tric ve­hi­cles on the roads. He believes the UK’S pri­ori­ti­sa­tion of qual­ity over quan­tity will give it an ad­van­tage, de­spite China “hoover­ing up the mar­ket”.

De­ci­sions will need to be made by the Gov­ern­ment, says Her­ron, about how se­ri­ously it wants to take the fu­ture of bat­ter­ies, and whether it wants to at­tract for­eign in­vest­ment or build its own self-sus­tain­ing in­dus­try.

“It de­pends on whether politi­cians want a short-term win or a long-term in­vest­ment.”

‘Trans­port in the West is re­liant on China. Ger­many is wak­ing up to get­ting bat­ter­ies up and run­ning in Europe’

Sir James Dyson’s elec­tric ve­hi­cles, due in 2021, could run on solid-state bat­ter­ies

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