Last reviewed 10 May 2022

Finance barriers are preventing billions of pounds being invested in a UK-based battery supply chain, a report has found.

The UK can become a global player in electric vehicle (EV) batteries if billions of pounds are invested now to build a battery supply chain, according to a new report published by the Green Finance Institute’s Coalition for the Decarbonisation of Road Transport (CDRT) that has been released today.

The report points out that electric vehicles are the future for road transport and highlights the opportunities to invest in the burgeoning global demand for EV batteries. Commenting on the report, Ian Constance, CEO of the Advanced Propulsion Centre (APC), said:

“To maximise green jobs and economic growth, gigafactories and their supporting supply chains are essential. The right balance of policy and support, as outlined in the CDRT report, is essential to secure investor confidence in the UK EV sector.”

The UK produces only around two gigawatt hours (GWh) of battery capacity a year and will need to ramp up to over 90GWh a year by 2030 to maintain a car industry at its current size, according to the Advanced Propulsion Centre (APC). But the report, Powering the Drive to Net Zero, argues that businesses across the battery supply chain are not receiving the levels of funding needed to scale up production, because banks and institutional investors are cautious about investing in emerging sectors, and battery developments are often considered high risk.

The global battery supply chain market is forecast to grow from $46 billion in 2021 to projections ranging from $116 to $278 billion by 2030 and failure to invest now risks seeing other countries capture this opportunity, the report adds. Mike Hawes, Chief Executive of the Society of Motor Manufacturers and Traders (SMMT), said that the transition to zero emission motoring is gathering pace and the industry needs fresh investment.

“To ensure the UK remains globally competitive as an EV manufacturer we need urgent backing to help transition our supply chain, bolster retraining and skills programmes and, crucially, increase our domestic battery production capability,” Hawes added.