The site of Tesla’s new gigafactory near Berlin. Britishvolt’s plans are for the first such plant in the UK © Getty Images

A start-up company has chosen a site in South Wales for what would be the UK’s first large-scale gigafactory to supply batteries for electric vehicles, with a planned £1.2bn investment which it says could eventually create thousands of jobs.

Britishvolt intends to start construction at the former RAF base at Bro Tathan, near Cardiff airport, early next year, after signing a memorandum of understanding this week with the Welsh government to work jointly on developing a “commercially viable” project. 

It aims to open the manufacturing facility in 2023 alongside a new solar power farm, although it added that the plans were subject to public funding. “Wales has welcomed us with open arms and exceptional due diligence and we believe the country has a vast untapped potential,” said chief executive Orral Nadjari.

Britishvolt, which was only founded in December, will look to raise £300m to £400m in equity through a stock market listing in 2021, with a reverse takeover most likely. An initial public offering is also a possibility, added Mr Nadjari. The rest would come through debt and an unspecified amount of government grants. 

Domestic EV battery manufacturing at scale is seen as vital to securing the long-term prospects of the UK car industry, which was suffering from a fall in production even before the pandemic.

While Britishvolt’s choice of location brings this a step closer to reality, it is no guarantee of success. The chemicals group Ineos recently put on hold plans for a car factory in Wales to assemble a 4x4 off-road vehicle that will run on a conventional internal combustion engine. 

The Welsh government said: “We are in the early stages of discussions with Britishvolt about its plans to develop a battery manufacturing plant in South Wales.”

European carmakers typically buy battery cells from suppliers in South Korea, China and Japan for assembly into larger packs to be used in electric vehicles. As the biggest car brands rush towards electrification, a number of companies are building plants in Europe to make cells from scratch, while Tesla is working on a $2bn gigafactory in Germany

The first phase of Britishvolt’s plan involves producing 10 gigawatt hours of lithium ion cells a year, enough for at least 100,000 vehicles depending on battery pack size. The initial workforce will be about 1,000. 

It then envisages two further stages to take the plant’s capacity up to 30GWh/year and 3,500 employees by 2027. 

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Although the UK already has a small EV battery factory in Sunderland that supplies Nissan, industry figures such as Ralph Speth, Jaguar Land Rover chief executive, have called for the government to work with business to make Britain less dependent on overseas supply.

Isobel Sheldon, Britishvolt’s chief strategy officer, said the investment rationale stood despite fears in the car industry over Britain’s departure from the EU. “Even if the demand on UK product is temporarily depressed because of the challenges of Brexit over the next couple of years, there’s still going to be plenty of business that we can supply into,” she said.

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