The UK government has released its "Battery Strategy" aimed at supporting the growth of a domestic battery industry that can cater to the electric vehicle (EV) and energy storage system (ESS) sectors. This move comes as both the European Union (EU) and the United States prioritize the development of their own battery industries. As global demand for batteries, especially lithium-ion, continues to rise with the electrification of society, all three regions aim to reduce their reliance on China and East Asia, which currently dominate battery production.

The UK government's objective is to create a globally competitive battery supply chain that supports economic prosperity and the transition to a net-zero economy. While the strategy paper does not provide specific targets, it outlines 15 measures or "policy options" to achieve this goal. These measures include providing over £2 billion (US$2.5 billion) of new capital and research and development (R&D) funding until 2030 for EVs, batteries, and their supply chains. The government also plans to offer sustained support for long-term research and innovation activities throughout the battery supply chain.

In addition, the UK government will invest £61 million specifically in battery R&D through various channels, such as the UK Battery Industrialization Centre and the Advanced Materials Battery Industrialization Centre. It also aims to support start-ups in the battery sector, expand market access for critical minerals, create a welcoming environment for foreign investment, and influence international standards for reuse, repurposing, and recycling of batteries.

The announcement of the Battery Strategy comes after the UK's only lithium-ion gigafactory company, Britishvolt, went into administration earlier this year. The US and the EU have been actively supporting their own battery industries, with the US providing generous subsidies for domestic battery production and the EU investing years of policy and funding work. The UK's only operational gigafactory is a 2GWh plant in Sunderland operated by AESC, with plans to expand manufacturing capacity to 40GWh. Tata, an Indian conglomerate, has also announced a 40GWh factory in Somerset. Both gigafactories primarily serve EV plants operated by affiliates, such as Nissan and Jaguar Land Rover.

The UK already has a thriving grid-scale battery storage market and a relatively strong EV manufacturing industry. Therefore, lithium-ion gigafactories in the country should have a ready market if they can offer competitive pricing. In conjunction with the Battery Strategy, the UK government announced a £960 million package for clean energy that includes support for battery manufacturing.

The reaction from stakeholders in the UK's battery supply chain has been mixed. Some view the Battery Strategy as a major step forward that recognizes the opportunities in becoming a world leader in the battery industry. They appreciate the government's acknowledgment of the economic and defense implications if the opportunity is ignored. However, others believe that the strategy falls short compared to the capital investments made by Western governments in developing their own battery industries. They emphasize the need for continued collaboration between the government, industry, and investors to foster growth and technical development in the sector.

Overall, the UK government's Battery Strategy sets a clear direction for the development of a domestic battery industry. By providing funding and support across the battery supply chain, the government aims to create a competitive and sustainable battery sector that contributes to economic prosperity and the country's transition to a net-zero economy. However, the success of the strategy will depend on the effective implementation of the proposed measures and continued collaboration with industry and investors.

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