- UK automotive industry sees electric momentum with significant investments and a lithium market revolution.
- APC Quarterly Demand Report indicates a 4 GWh surge in BEV demand by 2027, driven by Nissan and BMW Mini.
- Driven by Nissan’s commitment and a £3 billion investment in a gigafactory, the UK spotlights lithium localization and extraction innovations for a global impact.
Investments and lithium market revolution propels UK automotive industry’s electric growth
Exciting developments are propelling the UK’s electric vehicle (EV) scene, injecting a fresh wave of confidence into the battery electric vehicles (BEVs) industry.
The Advanced Propulsion Centre UK (APC) Quarterly Demand Report (Q3) reveals a notable 4 GWh surge in BEV demand by 2027. This is largely propelled by recent commitments from major players like Nissan and BMW Mini.
Dr Hadi Moztarzadeh, Head of Technology Trends, APC, said:
“We are starting to see the impact of the ZEV mandate in production plans and investment in the UK, alongside OEM strategy announcements for electrification. This is moving the UK automotive sector to a higher percentage of zero-emission vehicles faster than we are seeing in many other countries
Nissan’s recent announcement of investment in the UK is welcome news, which followed BMW’s investment in electric Minis, and JLR’s gigafactory commitment. These announcements combined with the Government’s Advanced Manufacturing Plan and the UK Battery Strategy will encourage other companies to look at the opportunities here. No doubt there are challenges ahead, but it is a really exciting time for the industry and these announcements show the UK can meet those challenges and support the industry and the broader global ecosystem through the transition to net zero.”
Nissan’s commitment to producing three new BEV models in the UK and constructing a cutting-edge gigafactory in Sunderland has given the industry a significant boost. This move entails a hefty £3 billion investment, underlining a tangible commitment to the EV future.
The report spotlights a promising dimension for the UK—the localization of the lithium supply chain. With both hard rock and geothermal brine sources of lithium, the UK has a unique advantage. The forecasted domestic supply of 46.5 kt falls short of the 64 kt demand, but companies, backed by APC funding, are making strides in various stages of lithium extraction. The report encourages new projects to come online swiftly, with the right support, to bridge the forecasted gap.
Dr Chris Jones, Strategic Trends Manager, APC, hypothesised:
“As covered in our recent Automotive battery value chains report, there are clear demand signals from automotive OEMs for Lithium Iron Phosphate (LFP) batteries. Currently, Nickel Manganese Cobalt (NMC) chemistry dominates the automotive battery market and from an investment point of view, you have access to a larger market if you are part of the NMC supply chain. So, despite those signals, the investment has been in setting up the NMC battery supply chain and less has been happening around LFP chemistry.
Lithium is a critical material for both NMC and LFP chemistries. So, we looked at the global lithium supply chain, including lithium extraction and upstream side, and the UK has some rich sources of lithium, in particular in brines, but also in granite deposits. The UK has many advantages that make it an attractive place to process material – for example we have Green Lithium, Leverton Lithium and Tees Valley Lithium looking to process lithium for batteries. Not only could these facilities service the UK market, but they could also supply non-domestic markets with a low- or zero-carbon battery grade lithium supply.”
Innovation in extraction methods is a concurrent theme, promising improved efficiency and reduced environmental impact. These advancements not only benefit the UK but also position it to contribute globally to an enhanced lithium supply chain. It’s especially prevalent given the upcoming Rules of Origin legislation. The localized supply chain will allow the UK to manufacture and export EVs without hefty tariffs.
The APC report underscores the UK’s potential to localize the lithium supply chain. Despite challenges, the UK seems well-positioned in the global EV landscape.