UK warned against being ‘overly reliant’ on Chinese EV batteries

Britain should keep away from changing into “overly reliant” on Chinese language battery expertise for electrical automobiles, the enterprise secretary Kemi Badenoch stated on Monday.

The warning got here as the federal government is concerned in finalising an anticipated deal between China’s Envision and Jaguar Land Rover proprietor Tata Motors to construct what be solely the UK’s second important manufacturing unit for electrical automotive batteries in Somerset.

The cope with India’s Tata, which is predicted inside weeks, would supply a giant increase to the UK’s automotive trade, which is struggling to draw investments from battery producers, however would additionally go away the sector closely reliant on Envision.

The Chinese language firm additionally constructed the UK’s first battery plant in Sunderland, which provides Nissan’s automotive manufacturing unit and is increasing it as a part of a £1bn funding. 

Badenoch stated Envision was welcome to spend money on the UK. “Now we have inspired them to come back right here,” she stated. However she conceded the UK needed to “guarantee that we’re not overly reliant on one nation” for battery expertise.

“What the pandemic confirmed us was that being overly reliant on any particular nation, whether or not it’s China or some place else, is horrible for having strengthened provide chains,” she added. 

Chinese language battery makers dominate the European motor trade, with extra factories than from another nation, together with South Korea and Japan. 

Badenoch acknowledged that China’s homegrown firms had developed world-leading battery expertise for electrical vehicles, making it tougher for the UK and different nations to compete.

“We have to recognise simply the energy that China has on this space and we have to assume extra broadly about the place now we have a comparative benefit,” she stated.

She added that China’s financial rise posed a “strategic problem” to the UK however pressured the federal government wished to have “a great relationship with the nation that helps us to affect the place we are able to”.

She added: “We can not minimize off our fourth largest buying and selling accomplice, we depend on it for a lot, however we recognise there are a variety of difficulties . . . whether or not it’s on human rights, financial coercion and so forth.”

Prime minister Rishi Sunak is looking for to restrict any safety threat posed by China in Britain’s industrial provide chains, however on the similar time is looking for to bolster financial ties in different areas. Earlier this 12 months, in an replace to the UK’s international and defence coverage, the federal government recognized China as an “epoch-defining problem.”

Badenoch was talking at WAE in Oxfordshire, previously Williams Superior Engineering, an offshoot of the Method One group now owned by Fortescue, after the announcement that the Australian iron ore group would construct a small-scale battery meeting manufacturing unit in Banbury.

The brand new manufacturing unit will make use of round 120 folks and provide batteries for heavy responsibility automobiles, equivalent to mining vehicles. The enterprise is in talks with round 20 potential suppliers of battery cells, none of that are within the UK.

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