The race towards fully electrifying our roads is on, and the UK has announced one of the most ambitious plans for replacing conventional vehicles with electric vehicles (“EVs”). The UK government has announced that it plans to bring forward its ban on the sale of new internal combustion engine vehicles from 2040 to 2030 as it looks toward becoming a net-zero economy. As such, numerous regions have been vying for the honor of hosting the UK’s first gigafactory, which will manufacturer electric vehicle batteries.
First popularized by American EV maker Tesla, a gigafactory is a large manufacturing facility that can produce up to 15GWh per year. Such factories can ease the transition from internal combustion-engined vehicles to electric vehicles by producing battery cells and packs to power the EVs. With the UK government pledging to contribute as much as £1bn ($1.33bn) to an automotive transformation fund, the country may have enough gigafactories to support full EV adoption.
However, despite hastening its plans to ban the sale of new internal engine vehicles and pledging funds to help the transition, the UK government hasn’t said how these funds will be used. According to an inside source, two serious investors are in discussions with the authorities, and one potential plan would involve a joint venture between European and British companies. With major automakers in the UK such as BMW, Nissan, and Jaguar Land Rover being pressured to switch from internal combustion engines to electric powertrains, the auto industry is impatiently waiting for the government to make a commitment.
According to a business department spokesman, the government recognizes the need for a “robust battery supply chain” if the country is to achieve full EV adoption within the given timeline. As such, securing investment for gigafactories is a top priority. Julian Hetherington, director of automotive transformation at the Advanced Propulsion Center (“APC”), says demand for EV batteries will go up as more automakers go electric. That upward movement will help secure investments for gigafactories. Predictions put the UK industry’s energy needs at 60 gigawatt-hours a year, meaning the country will need four gigafactories to meet the demand.
As the 2030 ban on the sale of fossil fuel vehicles draws closer and automakers such as Bentley unveil plans to electrify their entire line-up, the need for gigafactories will grow even greater. A single gigafactory can avail thousands of jobs — Tesla’s Nevada facility has around 7,000 employees — and plenty of regions want in on that action. South Wales, the West Midlands and the northeast of England have all thrown their hats into the ring. On top of creating plenty of jobs, a gigafactory would greatly boost the UK’s struggling automotive sector.
The EV sector across the globe is seeing a flurry of activity as many companies hope to capitalize on the wave bringing electric vehicles to the mainstream. One of the noteworthy entities you should follow is Net Element (NASDAQ: NETE). The global financial solutions firm recently announced a merger with a California-based EV maker called Mullen Technologies Inc.
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