It can be hard to predict what the future will hold. But one thing we can say with relative certainty is that it’s going to involve a lot of batteries. Driven largely by the growth of electric vehicle (EV) sales, the global market for energy storage is projected to more than treble by 2030.

Agratas build: the £4bn gigafactory will provide up to 40GWh of batteries

Meeting this demand will require vast cell manufacturing plants known as gigafactories – so named because their annual output runs into gigawatt-hours (GWh) of battery capacity. Although most of these plants are currently found in China and eastern Asia, the UK was one of the first countries in Europe to establish a large-scale battery plant, with AESC’s 1.8GWh factory in Sunderland opening in 2012. Earlier this year, AESC opened a second 15.8GWh gigafactory in the region.

Elsewhere, Tata subsidiary Agratas is well on the way to completing a new £4bn gigafactory in Somerset, which will provide up to 40GWh of batteries, while the Rigby Group is working on its GreenPower Park development near Coventry, which could accommodate up to 60GWh.

On the face of it, this all sounds pretty rosy. However, factors such as limited grid infrastructure, high energy prices and potential border taxes mean the UK faces tough competition from overseas. So, could this realistically represent a growth area for industrial and logistics (I&L) property?

Leeds-based programme management specialist Turner & Townsend (T&T) has worked on around 30 battery factories worldwide, including all three of the current gigafactory projects in the UK. Alessandra Arciero, director and UK EV battery lead at T&T, says UK gigafactories to date have relied upon government investment to help offset higher construction and labour costs compared with many other parts of the world. But she adds: “If the UK is going to be a major global player and we’re going to hit our green targets, we need to invest and build more of these facilities.”

The number of potential gigafactory sites may be relatively limited, however. Stephen Gifford, chief economist at The Faraday Institution and co-author of the UK Gigafactory Commission’s report ‘Britain’s Battery Future’, estimates that there are “perhaps a dozen priority sites” in the UK that could support a gigafactory at present. The likelihood is that this would more than cover demand.

If we’re going to be a major global player, we need to invest and build more of these facilities
Alessandra Arciero, T&T

The Warwick Manufacturing Group (WMG) estimates the UK’s battery consumption will be just over 100GWh a year by 2030 and around 200GWh by 2040. Even the upper end of that could be covered by five large-scale gigafactories.

Recent projects – not least the abandoned Britishvolt scheme in Northumberland – have underscored the importance of having an original equipment manufacturer (OEM) customer in place from the start. For AESC, that’s the neighbouring Nissan factory; for Agratas, it is sister brands Jaguar and Land Rover. “Previously, a lot of the effort has been directed towards battery manufacturers, but we’ve seen a shift in strategy towards attracting automotive OEMs – whether new or existing in the UK,” Gifford says.

Far-reaching impact

Arciero believes even a small number of gigafactories could have a far-reaching economic effect. “We see the opportunity for commercial developers and commercial agents being in the spokes around the hub as opposed to the gigafactory development itself,” she says. “You could have investments in the local road network or port facilities; logistics for incoming materials; housing and accommodation for the workforce. These all create jobs and contribute to GDP.”

This ‘hub’ effect is very much in evidence around existing automotive sites. In towns like Basildon, which is located next to Ford’s Dunton Technical Centre; Leamington Spa, which is 15 minutes from Jaguar

Land Rover’s factory; and Sunderland, which is home to Nissan UK, almost everyone locally has some direct or indirect link to the industry.

In Somerset, the land used for the Agratas factory was previously part of the giant Royal Ordnance Factory until Salamanca Group bought the whole site for its Gravity Smart Campus development, investing in utilities and securing planning consent before selling a 307-acre portion directly to Agratas.

Sir Robert McAlpine was initially brought in as the construction partner for the gigafactory, but in June it and Agratas mutually agreed to part ways.

TSL has since been announced as the new construction partner, with the first of the giant buildings on the site reportedly on course to open next year, with full opening scheduled for the early 2030s.

GreenPower Park, meanwhile, is a joint venture. The Rigby Group acquired the long leasehold for what was then Coventry Airport in 2010, while Coventry City Council currently retains the freehold.

What we’ve seen is that battery manufacturers want to be more flexible
Mike Murray, Rigby Group

Initially, the partners had plans for a single 5.7m sq ft factory, but the focus has since switched to dividing the site into smaller plots.

Flexibility focus

Mike Murray, commercial real estate director at the Rigby Group, says there is a sound business reason for the change. “If a single major occupier wanted a 60GWh factory, we could still provide that, but what we’ve seen is that battery manufacturers want to be more flexible,” he says. “So, they might prefer to have a 30GWh factory with room for their supply chain partners alongside.”

He adds that some international occupiers are looking at testing the UK market by bringing ‘pack-and-module assembly’ here. This involves assembling EV batteries in the UK using parts manufactured abroad. Murray says this allows companies to start with quite a small presence in the UK before deciding whether to expand.

Murray and his colleagues have conducted extensive benchmarking to understand the requirements for battery manufacturing at different scales. The aim, he says, is to tailor the land to the needs of each customer. “Their preference is generally to own their plots outright,” he says. “The equipment inside dwarfs the cost of the buildings, which are generally only about 10% of the total investment. We know what a given scale of facility will require, so we can build them a service plot – a level area with incoming services, access roads and so on – that they can hand over to their delivery teams.”

Powering up: the Rigby Group plans to build the GreenPower Park battery facility near Coventry

Grid connections, Murray notes, are a major part of this package. “It’s not just about land proposition; it’s about utility proposition,” he explains.

The Coventry site will have 50 megavolt-amperes (MVA) supply coming online in 2030, enough to support 30GWh to 45GWh of production. There will also be an option of bringing in another 180MVA from 2032, Murray says.

The upper end of that spectrum would put the factory’s power requirements on a par with a major data centre – or indeed a small town. It’s a massive commercial undertaking, which OEMs will study very carefully before signing off.

This brings us back to the crucial issue of battery demand. While EV sales have fallen short of the UK’s highly ambitious zero-emission vehicle mandate targets, growth has picked up significantly from a slowdown in 2024. EV sales were up 17.5% in June compared with the same period last year, and there remains broad agreement across the automotive industry that the transition towards battery-electric powertrains will continue – albeit more gradually than many earlier forecasts.

Murray says there is no shortage of demand for batteries in the UK, but adds: “Where we’re at [now] is converting the opportunities into projects that are investable and at the speed that manufacturers require it.”