Running low on battery power: Brexit Britain faces an acid test

Britain has set a fast pace in the electric vehicle race with its 2030 ban on sales of new fossil fuel-powered cars and has offered 1 billion pounds ($1.4 billion) to jump start its battery industry and associated supply chain.

But the cash and the headline-grabbing deadline – which is sooner than many other nations by several years – still leaves it trailing the European Union’s drive to create a supply chain and far behind China, the electric vehicle (EV) battery leader.

The stakes are high for Brexit Britain. To keep selling into the 27-nation EU without tariffs, Britain’s car industry, which employs 170,000 people, must ensure electric vehicles and the batteries that power them meet stringent rules of origin – with up to 70% of input in value terms coming from Britain or inside the EU.

With its 2030 deadline looming followed by its 2035 cut off for hybrids, Britain needs more battery factories – and fast.

Yet, even Nissan’s (7201.T) plans for a 9 gigawatt hour (GWh) battery plant in Britain – hailed by the government when it was announced in July – are dwarfed by two plants being built in Germany alone, Tesla’s (TSLA.O) 50 GWh plant near Berlin and Volkswagen’s (VOWG_p.DE) 40 GWh factory near Wolfsburg.

“We have come rather late to the party,” said Douglas Johnson-Poensgen, chief executive of Britain’s Circulor, who has worked with Volvo Cars and others on building sustainable supply chains.

The Department for Business, Energy and Industrial Strategy (BEIS), at the heart of Britain’s EV investment drive, says it is ensuring Britain remains a world leader in the auto industry.

“We remain dedicated to securing UK gigafactories, and continue to work with investors to progress plans to mass manufacture the batteries needed for the next generation of electric vehicles,” a spokesperson said in an emailed statement.

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