A UK start-up backed by former shareholders of collapsed battery group Britishvolt is teaming up with a Chinese supplier to try to build a £1bn gigafactory.
Coventry’s Volklec is backed by UK-based investment firm Frontive Group, which is controlled by brothers Imran and Sameer Khatri, past investors in Britishvolt who were unsuccessful in trying to buy the failed business out of administration two years ago.
The new venture aims to avoid the fate of the defunct business, which failed in part because it attempted to build a plant without having customers or batteries.
Volklec has a long-term deal with Far East Battery to use its engineers, manufacturing expertise and raw material supplies, and hopes to raise £1bn to help it construct a 10 gigawatt-hour factory that it claims will generate more than 1,000 jobs by 2030.
If successful, it would become the UK’s only large-scale independent battery manufacturer after the collapse of Britishvolt in 2023.
Britishvolt’s failure left the UK without a homegrown battery champion, as all of the country’s other projects rely on technology coming from Chinese businesses.
The UK has several battery factories under development, including one operated by JLR-owner Tata and another by Envision’s AESC, a Nissan supplier that already runs one gigafactory in the north-east.
“Our approach is one of pragmatism to get to the market quite quickly and to be revenue generating very quickly,” said Volklec executive director Phil Popham, the former boss of Lotus Cars and previously a senior JLR executive.
“That may be immediately through importing cells that are already in production in China,” he added, saying the business “needs that technology transfer” from China for technology development, manufacturing capability and supply chains.
Drawing on lessons from the past including the recent collapse of Northvolt, Europe’s biggest battery hope, Popham said previous attempts had been too ambitious in terms of technology development and plant construction, which led to missed deadlines and a loss of confidence among investors.
Volklec instead plans to start producing cylindrical nickel-rich battery cells for e-bikes and energy storage from later this year using an existing facility — the Coventry-based UK Battery Industrialisation Centre, a £130mn government-funded pilot to test battery production techniques.
From next year, it will aim to produce power cells for use in automotive, aerospace and marine. Popham said it was in discussions with potential customers, and will aim to serve low-volume manufacturers that are not able to build a gigafactory on their own.
It will only aim to build its own gigafactory once it has firm customers and has developed in-house capabilities, he said — another difference to Britishvolt, which attempted to build a factory before having orders.
Volklec’s reliance on Chinese technology comes at a time of high geopolitical uncertainty, even though the UK has held off from imposing higher tariffs on EV imports from China that the EU implemented from last October.
Brussels is also seeking Chinese companies to transfer intellectual property to European businesses in return for EU subsidies and is reviewing its regulations. But Beijing has gradually expanded export controls from curbs on battery materials such as rare earths to technology and processes that turn refined rare earths into the metals and permanent magnets used in EVs.
Popham said the export controls did not affect its agreement with Far East Battery, adding that the contract was flexible enough to give Volklec immediate access to the Chinese group’s expertise while allowing it to work with other partners if needed.
“It’s a road map that leads to localisation,” he said. “Our ideal is not to build a gigafactory of our own but to be a catalyst to build up the supply infrastructure in the UK.”