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Why are businesses investing in the UK battery supply chain?

Given the high forecast demand for batteries over the coming years, businesses are investing significantly in the UK battery supply chain. In 2023, we have already secured 52GWh in planned capacity for the UK – over halfway to meeting 2030 demand.

Where do EV batteries come from?

The majority of battery demand for EVs today can be met with domestic or regional production in China, Europe and the United States. However, the share of imports remains relatively large in Europe and the United States, meeting more than 20% and more than 30% of EV battery demand, respectively.

How much EV battery production will be in the UK?

Demand for EV battery manufacturing capacity in the UK is expected to be around 100 GWh per annum in 2030 29 (and nearly 200 GWh in 2040) with four-fifths arising from the manufacture of cars and light commercial vehicles (Faraday 2022a; BEIS 2023).

When will battery production be close to EV demand centres?

As manufacturing capacity expands in the major electric car markets, we expect battery production to remain close to EV demand centres through to 2030, based on the announced pipeline of battery manufacturing capacity expansion as of early 2024.

What is battery manufacturing?

Battery manufacturing is an energy intensive activity that would face steep industrial electricity prices without government support. Energy Intensive Industries (EIIs) in the UK currently benefit from 2 financial relief schemes that aim to reduce the cumulative impact of some energy and climate change policies on industrial electricity prices.

Why is battery production in China so important?

Battery production in China is more integrated than in the United States or Europe, given China’s leading role in upstream stages of the supply chain. China represents nearly 90% of global installed cathode active material manufacturing capacity and over 97% of anode active material manufacturing capacity today.

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