UK battery firm says it has learned from others' errors as it licenses Chinese tech

The Guardian

26-02-2025

A startup has said it has learned from Britain's faltering attempts to manufacture batteries for electric vehicles, as it signed a deal to license technology from an established Chinese firm.
Coventry-based Volklec plans to manufacture batteries for cars, boats, construction vehicles and aircraft using technology from China's Far East Battery (FEB), a maker of batteries mainly for electric bikes.
Volklec has appointed former Lotus Cars chief executive Phil Popham as executive director to lead its efforts. Popham said the company would take a low-risk approach to avoid problems that have hampered other British attempts to build EV batteries at scale.
The startup will aim to start producing batteries this year at the UK Battery Industrialisation Centre (UKBIC), a part government-funded research centre in the West Midlands. It will then find a site to build a factory making batteries with a cumulative capacity of 10 gigawatt hours (GWh) a year.
The UK has struggled to attract investment in battery manufacturing. There are two companies with 'gigafactories' in the UK: the Chinese-owned AESC, which supplies Nissan's Sunderland factory from a site next door, and Agratas, owned by the Indian conglomerate Tata, which is building a factory in Somerset to supply batteries to JLR, the maker of Jaguar and Land Rover cars. Those factories are aimed at producing batteries with total capacities of 38GWh and 40GWh respectively – enough for hundreds of thousands of cars apiece.
However, Popham said there was a need for a UK battery company to supply other businesses that did not have enough demand for a gigafactory on their own.
'We believe there is a robust market for an independent British manufacturer,' he said.
The partnership would make Volklec dependent on its Chinese partner at a time of increased geopolitical tensions, although the UK chancellor, Rachel Reeves, has sought investment from China to help meet growth targets.
Several prominent British automotive startups have shown promise before crashing into bankruptcy, including the bankrupt van maker Arrival and the failed battery startup Britishvolt. An effort to attract a battery company to Coventry airport has so far failed.
Imran Khatri, the co-owner of Volklec along with his brother, Sameer, was previously an investor in Britishvolt.
Popham said Volklec would learn from other companies' mistakes, taking a 'phased' approach that 'takes out as much of the risk as possible'.
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'Those companies that haven't been successful, it's because they tried to get to our stage three, rather than our stage one,' Popham said.
It will use FEB's technology, will bring in its technicians to mirror the manufacturing processes used in China, and will buy materials from its suppliers at the cost available to a larger company.
'The combination of the two [companies] gave us a fast route to market at low risk, at modest investment,' said Popham.
'Battery manufacturing is complex. The engineering is complex. It takes time, and it takes investment,' he added.
The first phase will involve making 100 megawatt hours of batteries on UKBIC's existing lines, before using spare space to produce another 1GWh of batteries there by the end of 2026. That 'springboard into a gigafactory' will cost about £100m, with £20m committed from the Khatris, Popham said. The 10GWh phase would take about £1bn in investment, and at least five years.