EVE Energy Sets Sights on £1.2 Billion Investment for Coventry Gigafactory Expansion

Image Credit: West Midlands Gigafactory

Reports indicate that EVE Energy, a Chinese electric vehicle (EV) battery manufacturer, is in negotiations to invest approximately £1bn into a new gigafactory on the outskirts of Coventry, UK.

The company, known for supplying batteries to major automakers like BMW, is contemplating an initial investment of £1.2bn to construct the West Midlands Gigafactory, a cornerstone of the planned UK Centre for Electrification investment zone.

According to The Times, EVE is exploring plans for an initial 20GWh gigafactory, with future phases potentially expanding the facility to 60GWh—nearly double the capacity of Nissan's electric battery factory in Sunderland, sufficient to power around 600,000 electric vehicles.

The envisioned gigafactory aims to offer a comprehensive solution for the EV sector, encompassing battery research, industrialization, manufacturing, testing, recycling, and electrified logistics.

While private funding could eventually reach up to £2bn, substantial UK subsidies are anticipated to be necessary to secure final investment approval for the project.

The initiative has the potential to generate up to 6,000 employment opportunities at the West Midlands Gigafactory, serving as the flagship tenant for the UK Centre of Electrification, a collaborative venture between local councils and Coventry airport's proprietors, where the gigafactory is slated to be established.

An update in October revealed interest from several leading Asian battery manufacturers in investing in the West Midlands Gigafactory.

"Based in Coventry, West Midlands, Gigafactory is the only available site in the UK that sits within an investment zone and has planning permission for a large-scale battery manufacturing facility," a spokesperson for the project said. "We are in discussions with a number of global battery manufacturers, but these remain confidential."

If realized, the project would join existing automotive manufacturing facilities operated by Jaguar Land Rover, Aston Martin Lagonda, and BMW in the West Midlands, along with the UK's largest battery research center, the UK Battery Industrialization Center.

EVE reportedly made a "multi-billion pound commitment" in a recent letter to Chancellor Jeremy Hunt.

A government spokesperson said: "We are determined to ensure the UK remains one of the best locations in the world for automotive manufacturing as we transition to electric vehicles while ensuring taxpayer money is used responsibly and provides the best value.

"We do not comment on speculation or the commercial affairs of private companies."

With a global workforce of 28,000, EVE began constructing its inaugural European gigafactory in Debrecen, Hungary, in November. Around 18 months ago, the company purportedly inked a deal with BMW to supply large cylindrical batteries for its European EVs.

The news follows BMW's confirmation of producing its new electric Mini in Oxford, supported by a reported £75m government grant.

These developments coincide with Tata Group's Agratas confirming plans for a multi-billion-pound EV battery gigafactory at the Gravity Smart Campus near Bridgwater in Somerset, with Jaguar Land Rover and Tata Motors as inaugural customers.

Agratas anticipates commencing battery production at the facility, capable of delivering 40GWh annually, by 2026.

Additionally, in January, AESC, a China-owned entity, secured a £200m bridging loan from the UK Infrastructure Bank to facilitate the development of its 15.8GWh gigafactory in Sunderland.

These recent announcements aim to address concerns regarding the UK's gigafactory capacity shortfall compared to projected automotive industry demand by 2030, known as the "gigafactory gap."