The gigafactory boom: How the UK risks falling behind in Europe’s EV revolution

Europe’s gigafactory boom

The demand for EV batteries is skyrocketing, and Europe has responded with a rapid expansion of gigafactories. By the end of the decade, 38 of these massive plants are expected to be operational, producing the battery cells needed to power the continent’s electric vehicles. Germany is leading the charge, with seven gigafactories already open or in the works, closely followed by Hungary and France.

Poland is home to one of the largest planned facilities, LG Energy Solutions’ plant, which is set to reach a capacity of 115 GWh per year. Other notable projects include Northvolt’s gigafactory in Sweden, which could eventually produce 60 GWh, and Tesla’s Gigafactory in Berlin, aiming for 100 GWh once fully operational. These facilities are essential for Europe’s ambitions to reduce its reliance on fossil fuels and meet its climate targets.

The UK’s position in the race

Despite early success with the establishment of Europe’s first gigafactory in 2010, the UK now finds itself in a race to catch up. The Faraday Institution estimates that by 2030, the UK will need six large gigafactories to meet domestic EV battery demand. Yet, only a few projects are currently in the pipeline. These include Tata’s Agratas gigafactory in Somerset, which is expected to produce 40 GWh annually by 2026, and AESC’s expansion of its Sunderland facility to 15.8 GWh.

The stakes are high. If the UK cannot secure more gigafactory investments, it risks falling behind as other European countries take the lead. According to Stephen Gifford, Chief Economist at the Faraday Institution, “More needs to be done, and quickly.” The UK has introduced measures like the UK Battery Strategy and the Automotive Transformation Fund to encourage investment, but the report warns that the country must act faster to stay competitive.

Germany, Hungary, and France: The leaders

Germany has become a magnet for battery manufacturers, thanks to its strong automotive industry and favourable business environment. Tesla’s Gigafactory Berlin and CATL’s Erfurt facility are two key examples, with both plants poised to produce massive amounts of battery cells in the coming years.

Hungary has also emerged as a major player, attracting companies like Samsung and SK Innovation. These firms are investing heavily in the country due to its central location and business-friendly climate, positioning Hungary as a critical hub for battery production.

France, meanwhile, has committed to becoming a leader in the green energy sector. Its Automotive Cells Company (ACC), a joint venture between Stellantis, TotalEnergies, and Mercedes-Benz, is building several large-scale gigafactories. These facilities will be crucial for meeting the country’s EV battery needs and reducing its carbon footprint.

Challenges and opportunities for the UK

The UK faces several challenges as it tries to compete with its European neighbours. Building gigafactories is only part of the equation—developing a robust supply chain and workforce is equally important. Gigafactories rely on a steady supply of materials like lithium, cobalt, and nickel, as well as highly skilled workers. Without these elements in place, it will be difficult for the UK to attract further investment.

However, the UK also has opportunities to carve out a niche in next-generation battery technologies. The Faraday Institution highlights the potential of solid-state, sodium-ion, and lithium-sulfur batteries, which could offer significant advantages over traditional lithium-ion cells. These technologies, still in the research phase, could give the UK a competitive edge if it acts quickly to bring them to market.

To secure its place in the global battery race, the UK will need to ramp up its efforts to attract inward investment, develop domestic refining and processing capabilities, and ensure a steady supply of raw materials. The government’s UK Battery Strategy outlines these priorities, but implementation will be key.

Europe’s battery landscape: A competitive market

The European gigafactory landscape is becoming increasingly crowded. Germany, Hungary, and France continue to lead, with gigafactories springing up across the continent. For example, Northvolt is working on a gigafactory in Germany’s Heide region, while Verkor plans to build a factory in Dunkirk, France, with a capacity of up to 50 GWh.

The competition between European countries is fierce, but the stakes are equally high. As Europe pushes to electrify its vehicle fleet and meet climate goals, securing battery production capacity has become a top priority for governments and companies alike. The Faraday Institution’s report makes it clear that while the UK has made progress, it must move quickly to secure its share of the growing EV battery market.

Conclusion

The race to build gigafactories in Europe is heating up, driven by the growing demand for electric vehicles and the urgent need to decarbonise transportation. Germany, Hungary, and France are leading the charge, attracting significant investment and establishing themselves as key players in the global battery market. Meanwhile, the UK, despite its early successes, is at risk of being left behind.

To stay competitive, the UK must accelerate its efforts to attract more gigafactories, develop a strong domestic supply chain, and position itself as a leader in next-generation battery technologies. The opportunity is enormous, but so is the challenge. If the UK can rise to meet it, the rewards for the economy and the environment will be substantial.

Source: The Faraday Institution