Within a decade, the sale of new petrol and diesel cars in the UK will be banned, the technology used to make them will be obsolete. And under the terms of the Brexit trade deal, three years from now all British-made cars exported to the EU will need to have at least 50 per cent domestic or European content if they are to avoid tariffs.
Which, depending on whether you view the glass as half empty or half full, leaves the British motor industry with either a huge challenge, or an exciting opportunity: to find a local supply of electric car batteries within the next few years.
There is no doubt which side of the fence Andy Street, the elected mayor for the West Midlands is on.
"Ensuring our own ability to build these car batteries at scale in this country is critical," he says.
"That means ‘gigafactories’, like the one built by Tesla in Nevada.
"A gigafactory, and the supply chain that would gravitate around it, will make a huge contribution to meeting the need for British-built parts in our cars. It will be vital not just future jobs, but for keeping the ones we have."
Few people will argue with that, but there is no doubt that developing a whole new industry in a very short space of time is a daunting task.
At the moment, the Envison plant in Sunderland, which provides batteries for Nissan and Renault cars, is the UK's only major manufacturer of batteries. The vast majority of electric cars produced in the UK and EU are sourced from east Asia, China’s CATL, South Korea’s LG and Panasonic of Japan being the market leaders. The Faraday Institution, a government-backed body to develop the industry, estimates Britain will need two battery factories by 2025, and eight by 2040 to meet demand for electric vehicles and batteries.
Envision is reported to have looked at extending its Sunderland works, but has been hit by a fall in demand for Nissan cars last year, which forced it to lay off a third of its workforce.
But the Envision plant will soon be dwarfed by the £2.6 billion Britishvolt battery works at the former Blyth power station in Northumbria, which will mark the biggest investment in the North East since Nissan’s arrival in 1984. Work is due to begin this year – although Northvolt is still in the process of securing funding – with the first batteries leaving the plant in 2023. The new works should provide 3,000 jobs for the region, as well as 5,000 more across the plant’s supply chain. By the time the plant is operating fully, in 2027, Britishvolt says it will be producing 300,000 lithium-ion battery packs each year.
Closer to home. there has been talk of creating a giant battery factory close to the M54 at Albrighton, just a few miles from the Jaguar Land Rover plant at i54, which will produce the drive units of future electric cars. The company is also building a battery assembly plant at its Hams Hall works near Birmingham.
At the smaller end of the volume scale, Hyperbat – a joint venture between Unipart and Williams Advanced Engineering – is developing a new battery works in Coventry, which will provide the power plant for a new electrically driven Aston Martin.
American electric car giant Tesla, which had previously looked at building one of its 'gigafactories' in the UK, before opting for Berlin instead – at the time founder Elon Musk cited uncertainty over Brexit as one of the reasons behind the decision – is reportedly back in the market for a site in the UK, although the details are sketchy. Musk visited the UK in June last year, and has been repeatedly linked with a site at Bridgwater in Somerset. But the month before his visit, Musk had submitted documentation with the authorities that would allow him to enter the UK energy market, and that could be where his plans for the Bridgwater site lie.
Industry expert Ian Henry, who works with a number of major carmakers, said one key issue in preserving the UK car industry was creating an entire supply chain, including manufacturing important and chemically complicated parts such as the cathodes crucial to lithium-ion batteries.
“By the mid-2020s, the UK has got to be doing a lot more than just assembling bits from a kit,” he says. “Several core processes in battery manufacturing will have to take place here in order for the UK to have a viable electric vehicle industry.”
Of course Britain is not alone in facing such challenges. The same applies to carmakers and governments in mainland Europe, which are also pouring billions of euros into new battery plants. Sweden’s Northvolt and the French oil producer Total among the frontrunners. However, countries such as France and Germany have the advantage that their largest car producers are indigenously owned, and are therefore more likely to invest in their home countries than abroad. So far, the UK is lagging behind when it comes to securing funding, and the Faraday Institution has warned that failure to build a UK battery supply chain could cost more than 100,000 jobs by 2040.
To counter this, the Government has funded the £130 million UK Battery Industrialisation Centre in Coventry, which provides test facilities for new battery technology.
Neil Morris, chief executive of the Faraday Institution, is quietly optimistic that Britain will seize the opportunity and create thousands of new jobs in a green industry. He says while the clock is ticking, a combination of existing expertise and government support should make the UK an attractive destination for battery investment.
He says the UK's status as Europe's fourth largest producer of cars will play a crucial role in attracting battery producers.
"One of the key criteria battery manufacturers look to when placing a battery factory is proximity to car manufacturing," he says.
Hyperdrive, which is located next door to the Envision factory in Sunderland, has seen rapid growth developing battery equipment for JCB and hydraulic platform producer Snorkel. Company founder Stephen Irish says: "We’re hanging on the coat-tails of the huge investment in automotive battery cells and we’ve engineered our product around those."
Another edge the UK has over its competitors is some of the largest suppliers of materials for producing electrodes and electrolytes.
“We have a chemicals industry in the UK that is potentially well set up to supply into a battery manufacturing industry,” says Mr Morris.
“They’ll need to invest and make slightly different products, but we already export graphite to China so that they can make batteries to sell back to us.”
Mr Morris says that the UK's greatest strength is its research base, and the level of collaboration between universities and industry are working together.
But he also warns that there is no time to waste, and if the UK does not develop a battery supply chain soon, the prospects for the British car industry could be grim indeed.
“There is a sense of urgency here,” says Mr Morris, “We are falling further behind. A lot of capacity has been announced in Europe particularly in and around Germany and our government was probably a bit slower to announce incentives. There is no doubt that the uncertainty around Brexit last year and the distraction that caused for the Government means that we do need to pick up the pace.”
On the positive side, though, Mr Morris does believe both the Government and the industry has an appetite to rise to the challenge.
"Electric vehicle manufacturers would very much like the UK to have battery manufacturing to support them making more vehicles in the facilities they have here in the UK," he says.
"And I think that government wants to secure the jobs, and secure a position in part of the energy mix of the future and to be a major player in battery production and battery technology development."