Two United Kingdom firms have disclosed that they plan to invest up to 4 billion pounds ($4.9 billion) to build the country’s first large-scale automotive battery cell factory by 2023.

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The companies, small-scale cell producer AMTE Power and Britishvolt, a startup, are considering sites to build the first of two factories with an initial investment of 1.2 billion pounds. Capacity would be 10 gigawatt-hours, rising to 30 GWh in the future, Britishvolt CEO Lars Carlstrom told Automotive News Europe in a phone interview.

The cell plant at Nissan’s Sunderland factory in northeast England has a capacity of 2 GWh per year.

Britain is behind other European countries in battery cell investment, but the governing Conservative party made establishing cell production part of its election promise in last December’s vote.

The European Commission has given approval for governments in seven countries to grant 3.2 billion euros ($3.53 billion) to support projects for research and innovation in battery technology. The countries are Germany, France, Italy, Belgium, Finland, Poland and Sweden.

In one effort, PSA Group is moving ahead with a project in collaboration with Saft to build cell factories in Germany and France.

The UK project’s total investment will be 4 billion pounds, with support from the government’s Advanced Propulsion Center, which funds automotive innovation to reduce emissions.

Carlstrom said Britishvolt was looking at five potential sites between southwest England and the central Midlands area and was in discussion with a major battery cell maker to build high-density 21700 lithium-ion cells. The factory would also build cells for nonautomotive energy storage.

Britishvolt and AMTE are hoping to land a contract from Jaguar Land Rover, Carlstrom said. “JLR is a very important player. And they’re also very picky in terms of having the right product,” Carlstrom said. “We feel we will compete with LG Chem [the automaker’s current battery cell supplier] on quality and pricing.”

Jaguar Land Rover CEO Ralf Speth has said that the UK needs its own cell production, but operated independently of the automaker.

The Faraday Institution, a government-funded group that supports energy-storage science, said that Britain urgently needs to secure battery-cell plant investment while global battery players are still deciding where to put capacity.

“Within a year, most car producers and battery manufacturers will make their decisions about where in Europe the next generation of gigafactories will be built.
Without urgent action, the UK is in danger of losing out in the race,” the group said in a report. The Chinese battery maker CATL recently announced it was expanding the size of a bond issue to fund a German plant.

Automakers are increasingly looking to source battery cells more locally than Asia, where most lithium-ion battery cell capacity is located now. “We need to understand if we’re to have a green infrastructure then you can’t transport batteries from Asia,” Carlstrom said. “They’re very heavy, and transport causes a lot of pollution.”

Britishvolt was formed last year and is backed by investors from Scandinavia and Abu Dhabi, Carlstrom said. Carlstrom’s previous involvement in the automotive industry included key roles in consortiums seeking to buy now-defunct Saab from General Motors in 2010, including the Genii group backed partly by Formula 1 entrepreneur Bernie Ecclestone and the Convers group, headed by Russian banker Vladimir Antonov.

AMTE Power makes specialist cells in a plant in Scotland for niche electric vehicles.