Isobel Sheldon OBE discusses how Britishvolt stands to revolutionise the lithium-ion battery sector in the UK and beyond.
Britishvolt is looking to lead the lithium-ion, and beyond lithium-ion, battery sector by implementing a sustainable, highly advanced manufacturing and business strategy to deliver on the exacting needs of its customers and assist in the acceleration of sustainable transport and the renewable energy sector.
The site for its gigaplant has now been chosen, and with post-Brexit rules on the sourcing of batteries and related materials coming into force, the timing appears right for this ambitious new endeavour.
The Innovation Network’s International Editor, Clifford Holt, spoke to the company’s Chief Strategy Officer, Isobel Sheldon OBE, about how it will benefit the UK and European economies and how Britishvolt will stand apart from its competitors.
What is the founding ethos behind Britishvolt? How does this tie into the UK Government’s plan for the UK’s green recovery and its efforts to reach a Net Zero economy by 2050? Are you on track to achieving your vision?
The founding ethos behind Britishvolt was set well before the coronavirus pandemic; even before the improved environmental view of the car buying public was formed. We saw a significant opportunity to enter into the battery business because of the increasing demand resulting from the automotive industry moving towards electric vehicles. Indeed, every public electric vehicle that was released in 2020 sold out some 18 months of production capacity within just a couple of days; the public is now ready for a wider roll-out.
The automotive industry has been lagging behind in some ways, however, and was perhaps caught a little off guard by the internal combustion engine ban that is being brought into the UK and some of other European nations. Nevertheless, this ban has meant that some of the plans have been accelerated, and we are starting to see those changes now occurring, filtering through from the OEMs.
BMW has gone on public record saying that it wants to supply the market with 250,000 EVs by 2023 and that 20% of its product mix will be EV by 2025. Ford has announced that by 2030, all of the cars that it sells within the UK and Europe will be electric, and Jaguar has outlined a 15-year strategy which will see it phase out diesel vehicles. This huge demand is creating a supply gap in the battery market in Europe, as the rules are changing – the UK and Europe will be unable to import from the Far East from 2024-2027, and so domestic manufacturing is an imperative to support the UK and European automotive industry.
We also want to ensure that we are outperforming our competitors. There is a lot of battery capacity being put into Europe at the moment, but much of it is on legacy technology and legacy manufacturing assets. Britishvolt, however, is starting with a reimagining of the battery manufacturing process, meaning that we can bring the latest and greatest technology and processing capability to the battery sector, providing elevated performance while staying cost competitive.
In addition, the lithium-ion battery was invented here in the UK, and our activities present an opportunity to bring it home, ensuring that for the first time in decades we actually capitalise on the inventiveness of the UK academic and research space. We have some of the best minds in the world working in battery technology here in Britain, and it is also receiving an enhanced level of support – for instance, via the UK Government’s Faraday Battery Challenge. We need to capitalise on that.
Thus, when we look at the landscape for batteries in Britain today, including the government’s support, the industrial strategy, the internal combustion engine ban in 2030, the full internal combustion engine ban in 2035, and the road to net zero in 2050, plus the government’s stated ambition that batteries are going to be an important strategic lever for the country to pull moving forward, it is clear that we are in the middle of government strategy, and have also developed a great business proposition.
We are certainly on track to achieve our ambitions, too. Construction of the factory is scheduled for the third quarter of this year, with production expected to start at the end of 2023. The first phase, going into 2024, will see the first 10 gigawatt hours, with the second 10 gigawatt hours being achieved by 2025, and the third 10 gigawatt hours in 2027.
We began not so long ago as a start-up and have quickly grown into an established player in the business. We have a robust plan, and we are now executing on that plan.
The UK Government has identified the development of current and future generations of battery technology of strategic importance to the UK’s manufacturing sector and key to sustaining our valuable domestic automotive industry. What role will Britishvolt play in this?
The free trade agreement has opened up market opportunities right across Europe, and we are in conversations with all of the automotive industry here because the way we intend to approach the market is very different to the incumbent suppliers. Poor sales were seen for compliance vehicles, and the battery industry had to concentrate on creating a small range of products and selling them to as many OEMs as possible. Now that each individual brand’s volumes are starting to build into a sizeable requirement in their own right, this allows us to tailor per brand.
Over the last 70 years, the automotive industry has differentiated in terms of powertrain, but in the future that will change to the need to differentiate on battery performance. That is, an electric BMW will need to drive like a ‘traditional’ BMW, and the same is true for the other brands. This means that taking the battery from one brand and putting it into another is simply not going to work. That customisation at the brand level, the appreciation of the brand value, and tailoring the cells to meet the performance requirements expected from those OEMs is incredibly important.
This is relevant to the UK because the materials science and the technology development that has been taking place here is years ahead of most of the rest of the world. There are thus developments that we can utilise and can implement in manufacturing that are simply not available in the wider cell market at the moment. That will help us to create that brand positioning, which will be crucial to taking on the likes of Tesla, which may have market dominance at the moment, but which does not have the level of quality that we would like to achieve.
Alongside this, contributing to UK PLC GDP is an important part of our vision for the future; we will be involved in the levelling up agenda in the northeast of England, for instance, meaning that we are able to spread that economic benefit; upscaling and hiring local people to work in our facility with well paid jobs is a really important part of the Britishvolt ethos.
Given that, post-Brexit, battery packs must have 30% of their content sourced from the UK or EU at first in order to trade tariff free as part of the agreement, with those requirements getting stricter starting in 2024, how crucial is your enterprise to both the UK’s and Europe’s electric mobility future? And how will you ensure that Britishvolt’s batteries will be tailored to customer needs?
From the beginning of last year, our strategy has been to ensure that we disconnect our supply chains from countries which take an unsustainable view of the environment. A perfect example of that is China, which has a very coal-dominated electricity generation system and which uses non-Western business practices which are resulting in some quite substantial environmental- (and health-) related concerns, not least with regards to air quality.
This is a massive problem for the battery sector because, in the past, materials were sourced from such places because they were cheap, but the negative impact on both the environment and people’s lives needs to now be considered.
The relocation of the battery sector to Europe for European demand is thus a very welcome development, and the increase in regulation and restrictions for importing those high-carbon intensity materials fits very well with the strategy we set last year. We are therefore looking at concertinaing the supply chain, bringing it as close together as possible, whilst also using a very high renewables content on the front end, meaning that even the necessary energy intensive processes can be run at very low-carbon intensity levels. Then, because we are co-locating as much as possible, we can look at site-wide energy efficiencies and energy recovery and reuse, which offsets some of the high cost of renewables in the UK as compared with China.
All of these things come together to create an extremely positive outlook, and I think that we also need to understand the need to start making our own things here in Europe and to rely less on importing them from the Far East, because there is a lot of value to be captured and the European and UK economies will benefit dramatically from that.
We have also been building Environmental, Social, and Corporate Governance (ESG) requirements into our business plan right from the beginning. This is not only important in terms of making sure we are doing the right thing, but it is also important for our investors and customers, because ESG requirements for the automotive industry’s supply chain are now being prioritised. Indeed, by 2025 it is going to be very important to be ESG compliant.
Will Britishvolt batteries have a competitive advantage? How will they be different from the competition?
We are reimagining the manufacturing process, so it is much easier for us to adapt to new technology and new manufacturing processes. There has been something of a step change in battery technologies recently, and some of the things that were not possible in the past now are, and so we can start looking to adopt those new technologies to give us an uplift in performance in, for instance, the energy density and therefore the range of electric vehicles, which is the headline figure.
We are also looking at the low-cost, low-cobalt materials development. Traditionally, that has been lithium ferrophosphate (LFP), and while this does provide some answers, it is still not quite enough in terms of energy density and range to be useful in a lot of applications. We are therefore looking at the next steps and at adopting them into our manufacturing strategy so that this solution can be offered to those vehicles that are going to take care of the aspirant purchases.
For instance, there are those who would like to drive a Range Rover but cannot afford the top of the line model with the highest range, or those who want to drive such a brand but only need to make more local journeys and so do not require the more expensive version. By taking a segmented view of the automotive market, we can ensure that we have the right products for the different levels in the different market segments, which is something that nobody else is doing; we will create a premium product for the premium end of the market where performance is everything, but will also cater for the other end of the market and the ‘C segment’ vehicles, exploring the trade-off between cycle life price and energy density. We will work with manufacturers to understand the brand attributes and design, manufacture, and sell to meet those needs.
Why was the UK – and the north east specifically – chosen as the location for the battery gigaplant? How will you draw on the area’s industrial history to find the necessary staff and skills? How do you hope to see the necessary supply chain evolve around it, and what action(s) will be taken to ensure that these supply chains are kept as short as possible?
Regarding the supply chain, this is essentially about relocating the conversion processes, much of which currently take place in China where, as previously mentioned, energy intensity levels and carbon emissions are very high. Locating those processes – making the sulphates and other materials, as well as the cathode active material etc. – on site and as close to the facility as possible not only dramatically reduces the multiple journeys that these materials take around the world, but also means that we can operate on a much more ‘just in time’ approach, with less stock holdings and so a reduced operating cost.
Take, for example, synthetic graphite, which is used in the anode; the best needle coke in the world is produced from North Sea oil production in Lincolnshire. It then goes to China and Mongolia to be milled and graphitised before being distributed across the world. By co-locating this process on site, we cut out much of the current logistics, as well as the embedded carbon it entails, not to mention the time it takes for the material to be made ready. It will also be much cheaper. Such logistics chains can thus be shortened, and we can therefore be much more dynamic and responsive, both to technology change but also to demand profiles too.
The North East of England was a great choice for the gigaplant; it is the prime site in the whole of the UK (we shortlisted 100 sites and looked at 40 of them in detail). Of the two that made the final cut, Blyth was the best. One of the main positives is that it is on the coast (it would be impossible to locate a gigaplant in the middle of the country due to the cost of the land, the reduced accessibility, and the limited (direct) access to renewable energy).
We also needed to act quickly, and the site in Blyth is available immediately. It also benefits from the North Sea Link cable, accessing hydroelectric power from Norway, as well as the landing station for the Dogger bank Wind Farm, which is producing around 40 megawatts at the moment with a predicted increase to 100 megawatts, all of which is within 400 metres of the site. The local authority is also incredibly supportive.
In terms of the employment elements, the North East is one area in the UK that has seen underinvestment for a number of years. Of course, Nissan invested in the region in 1984, which was transformational for the area. Since then, the region has established a long history of industrial activity north of the River Tyne, and the wind energy Catapult is located at the port in Blyth. We therefore see the availability of a workforce as being very good.
We do have to remember, of course, that battery manufacturing is not something that has been done at a significant scale in the UK before, certainly not full cycle. As such, the skills simply do not exist for all of the positions, and so we are linking up with Newcastle University and the UK Battery Industrialisation Centre and others to provide a training programme to retrain and upskill the workforce we need. We are incredibly focused on making sure that local people benefit from this facility.
With Dr Allan Paterson as CTO, where will your priorities lie in terms of R&D capabilities?
The main thrust of the R&D strategy will fall into a number of different areas; there is a lot of siloed materials development that has been happening in recent years and that has shown a lot of promise, but pulling them together into a cell system remains a challenge.
I have known Allan Paterson for some time; his history with batteries is almost as long as my own (regarding lithium ion batteries in particular). As an electrochemist, he has been involved in solid state chemistry, for instance, and he knows what the cutting edge looks like.
His task will be to build the IP portfolio around some of the newer technologies and how they come together in cell systems, and also to look at the new formats and how we can utilise theme to give our customers a competitive advantage in the marketplace.
What needs must be met in order for Britishvolt to begin manufacturing on time? And has the COVID-19 pandemic caused any significant problems?
Because our facility is not yet up and running, and because our staff have therefore been able to work effectively from home, the impact of the coronavirus pandemic has been minimal. Similarly, because we have yet to become fully operational, we have also been able to use the virus as an opportunity to see how such a crisis affects both a business like ours and our potential customers, learning as many lessons as we can and building what we learn into mitigation measures that can be incorporated into our business plan moving forward. This will ensure that, should we end up in a similar situation again, we can continue to operate by having COVID-safe measures built into the facility.
In terms of the date we can begin construction, there is every indication that things are getting better, and the government has said that we should see a return to some kind of normality by the summer. As construction has continued in other areas throughout the pandemic, we do not anticipate any significant problems. Nevertheless, we will continue to watch how events unfold.
When it comes to finances, we have now finished the funding rounds that were needed to reach where we are today, and we have been stress tested by the investment committees of some of the major international investment banks who have agreed to work with us, and we are looking at offers from a few of those now as we decide which route to take. Even when we decide on our investment banking partners, there are different ways of raising the finance over time and within this first quarter we will make some decisions based on the very best advice that the financial world has to offer.
Please note, this article will also appear in the fifth edition of our quarterly publication.
