The Chinese company behind the UK’s only “gigafactory” is planning a huge expansion of the project and looking to spin off its electric vehicle battery division as it builds its European business.
Zhang Lei, chief executive of Envision, said the Sunderland facility’s annual capacity would eventually rise to 38 gigawatt hours, enabling the site to produce batteries for hundreds of thousands more electric cars each year.
The plans would mark a steep increase from the 1.7GWh capacity at a smaller existing plant and 11GWh when the site’s new plant is due to open.
Production from the first phase of the Sunderland plant expansion is set to start in 2024 as part of a partnership with Nissan UK.
Envision’s $2.4bn gigafactory in Douai, France, in partnership with Renault, is also due to open in 2024.
Zhang said the company was in talks with global carmakers to supply batteries from the two sites. Envision also has battery plants in Japan, the US and China.
“The electric car has become the starting point for the green industrial revolution,” he told the Financial Times.
He added that the Shanghai-based company, which is China’s largest wind turbine manufacturer, would “definitely” list its global battery business. “It could be soon,” he said. “It’s all on the board decision. We have a very international board.”
China’s battery companies are expanding rapidly in Europe, as the continent’s largest carmakers pledge to spend billions to switch their fleets to electric cars. CATL, the world’s largest battery maker, as well as fellow Chinese groups SVolt Energy and Guoxuan, are all building battery plants in Germany.
Shares in CATL have risen 68 per cent this year, valuing the business at Rmb1.38tn ($216bn), as investors bet on the global transition away from fossil fuels.
The existing Sunderland factory, which makes batteries for the Nissan Leaf, was acquired by Envision Group when it bought Nissan’s battery business, AESC, in 2019. The new factory will be completely powered by renewable energy.
Zhang said the company was looking at locations for new gigafactories in Europe and was considering investing in battery materials such as lithium to secure supplies.
“We are planning that — we are talking to a few companies,” he said.
Zhang added that securing supplies of renewable energy was key for lower-cost battery production. Envision is building a 20GWh battery factory in a “net zero” industrial park in Ordos, Inner Mongolia, one of China’s biggest coal-producing provinces.
The company has pledged to be carbon neutral across its operations by the end of 2022 and in its supply chain by 2028.
“If you can use the cheaper green energy, you can secure your energy cost for the next 20 years with lower prices than fossil fuels,” he said.
The Ordos plant will supply electric trucks being built by China’s FAW Group as well as provide storage for renewable electricity in Inner Mongolia.
Zhang said China needed to move manufacturing close to places with abundant renewable energy.
“That’s my solution to China’s energy crisis,” he said. “Let’s provide more renewables — the current [energy] shortage is not the fault of renewable energy. It’s the opportunity to pump in more renewable energy.”