A UK startup, Volklec, has announced plans to manufacture batteries for electric vehicles, boats, construction equipment, and aircraft, taking a calculated approach to avoid the pitfalls that have hindered previous British attempts in the sector. The Coventry-based company has signed a deal to license technology from China’s Far East Battery (FEB), a well-established battery manufacturer known primarily for supplying electric bike batteries.
Volklec aims to carve out a niche by focusing on businesses that do not require a full-scale gigafactory but still need high-quality battery solutions. By leveraging FEB’s expertise, Volklec can rapidly enter the market while avoiding the enormous capital investments and risks associated with building a battery manufacturing facility from scratch.
What Steps Is Volklec Taking to Minimize Risk?
Volklec has appointed Phil Popham, the former chief executive of Lotus Cars, as executive director to lead the initiative. Popham emphasized that the company would follow a phased, low-risk approach to mitigate potential challenges.
“Those companies that haven’t been successful, it’s because they tried to get to our stage three, rather than our stage one,” Popham stated, highlighting Volklec’s commitment to a gradual and sustainable growth model.
Instead of immediately investing billions into a large-scale gigafactory, Volklec will start with a modest production capacity. This allows the company to test its technology, refine its processes, and establish a customer base before expanding further.
Where Will Volklec Begin Production?
The company intends to commence battery production this year at the UK Battery Industrialisation Centre (UKBIC), a government-backed research facility in the West Midlands. Following this initial phase, Volklec plans to establish a full-scale factory with an annual production capacity of 10 gigawatt hours (GWh).
UKBIC offers a state-of-the-art environment for battery research and development, providing Volklec with access to advanced equipment, skilled personnel, and a collaborative ecosystem. The facility allows the company to scale up gradually, ensuring each stage of development is carefully managed.
Why Has the UK Struggled to Attract Battery Investments?
The UK has faced significant challenges in attracting large-scale investment in battery manufacturing. Currently, only two gigafactories operate in the country. The Chinese-owned AESC supplies Nissan’s Sunderland factory, while Agratas, owned by the Indian conglomerate Tata, is building a plant in Somerset to produce batteries for Jaguar Land Rover (JLR). These facilities are set to deliver 38GWh and 40GWh of battery capacity, respectively—enough to power hundreds of thousands of electric vehicles.
However, Popham noted a gap in the market for an independent British battery manufacturer catering to businesses that lack the demand for a dedicated gigafactory.
“We believe there is a robust market for an independent British manufacturer,” he said.
Many companies, particularly those in niche automotive, aerospace, and industrial sectors, require battery solutions but do not have the financial resources or volume requirements to justify their own gigafactory. Volklec aims to fill this gap by offering flexible and scalable battery production services.
How Will the Chinese Partnership Benefit Volklec?
While Volklec’s collaboration with FEB provides an expedited market entry and cost advantages, it also ties the company to a Chinese partner amid increasing geopolitical tensions. Despite these concerns, UK Chancellor Rachel Reeves has encouraged Chinese investment to support economic growth targets.
Under the agreement, Volklec will use FEB’s technology, replicate its manufacturing processes, and source materials from FEB’s suppliers at competitive costs.
“The combination of the two [companies] gave us a fast route to market at low risk, at modest investment,” Popham explained.
By partnering with an established Chinese manufacturer, Volklec gains access to a wealth of expertise, proven technology, and a reliable supply chain. This reduces the risks associated with developing new battery technologies from scratch and ensures that Volklec can compete effectively in the market.
What Lessons Has Volklec Learned from Previous Failures?
The UK’s automotive sector has seen multiple high-profile failures, including Britishvolt, a battery startup that went bankrupt, and Arrival, a van manufacturer that collapsed despite early promise. Efforts to attract a battery company to Coventry Airport have also been unsuccessful.
Imran Khatri, a co-owner of Volklec alongside his brother Sameer, was previously an investor in Britishvolt. Popham emphasized that Volklec would apply lessons from past failures to avoid similar outcomes.
“Battery manufacturing is complex. The engineering is complex. It takes time, and it takes investment,” he added.
Britishvolt’s downfall was partly attributed to overly ambitious expansion plans, mismanagement, and funding shortages. Volklec, in contrast, is taking a measured approach, focusing on sustainable growth and strategic partnerships.
What Are the Next Steps for Volklec?
In the first phase, Volklec will manufacture 100 megawatt hours (MWh) of batteries using UKBIC’s existing production lines. The company will then expand its operations within the facility to produce 1GWh of batteries by the end of 2026.
This gradual expansion will require an estimated £100 million investment, with £20 million already committed by the Khatri brothers. The final stage, scaling up to a 10GWh production facility, is expected to take at least five years and will require approximately £1 billion in funding.
Volklec is also exploring potential locations for its full-scale manufacturing plant. The company is considering sites with strong infrastructure, proximity to key customers, and access to skilled labor.
What Impact Could Volklec Have on the UK’s Battery Industry?
If successful, Volklec could play a vital role in strengthening the UK’s battery supply chain. By offering a domestically produced alternative, the company may help reduce reliance on imported batteries and support local industries in their transition to electrification.
The UK government has been keen to bolster its battery manufacturing capabilities to ensure the long-term competitiveness of its automotive sector. Companies like Volklec could help bridge the gap, providing much-needed capacity while fostering innovation in battery technology.
With a clear strategy, established partnerships, and a focus on risk mitigation, Volklec aims to carve out a significant role in the UK’s battery manufacturing landscape. If the company successfully executes its plans, it could emerge as a key player in the evolving global battery market.
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