Batteries are the linchpin of modern manufacturing, foundational to automotive electrification, aerospace systems, defence platforms, marine vessels, grid infrastructure and industrial energy storage.
Indeed, no two applications are ever the same. The automotive industry, for example, requires reliable, high-volume supply to support mass-scale EV production; aerospace needs high-performance, lightweight batteries for integration into electrified and hybrid systems; while defence and marine need durable, reliable solutions ready for demanding operational requirements.
These sectors, however, are bottlenecked by the UK’s limited capacity to manufacture its own batteries.
UK battery supply chains: a lesson in fragility
To overcome his hurdle, one school of thought is to rely on proven Chinese expertise, continuing to outsource most Western battery requirements to the established manufacturers of the East.
However, concentrating the production of batteries in a small number of regions is a risky approach. A nation that lacks supply chain control over such a critical technology is at the mercy of this fragile ecosystem, leaving itself exposed to pressures which can ripple through the entire value chain. In practice, this can mean vehicle or system programmes being forced to freeze designs early, or re-qualify entire battery packs, simply because a preferred cell format or supplier cannot be secured at the volumes, price or timescale required.
Take the oil sector as a comparative example. Oil benefits from a globally distributed, highly skilled workforce that can drill, pump, refine and operate across the value chain. There are around 40 nations producing oil, each with their own strategic reserve; if one source becomes untenable, industries reliant on oil can seek procurement elsewhere.
Oil benefits from a mature and transparent pricing market, and price shifts are more easily modelled against profitability in oil-heavy industries like steelmaking. Battery inputs, on the other hand, lack comparable price transparency and forecast-ability. With around 85% of all battery supply controlled by China, pricing is generally opaque and can differ wildly from supplier to supplier, uncoupled from the underlying raw material markets.
This complicates investment and operational decisions. It has the net effect of a distorted cost structure and unpredictable input economics that undermine planning for downstream industries.
Reliance on overseas battery production to support these sectors raises concerns around security, assurance and long-term availability, while low capacity to make home-grown batteries means the sectors are forced to compete for limited global supply, often at a major disadvantage. It must be noted that these constraints are beyond theoretical; they are issues we see repeatedly in discussions with OEMs, defence customers and system integrators navigating qualification, pricing and long-term supply commitments.
Addressing the knowledge gap
The second school of thought is to build up rival manufacturing bases in the UK and do what business schools have taught for decades – to compete.
The UK is a hub of innovation and boasts some of the best universities and research institutions in the world. We have a strong heritage in advanced manufacturing, materials science and engineering excellence. Notably, the UK demonstrates strength in industries demanding tight tolerances and complex quality controls, such as paint, F&B, FMCG and pharmaceuticals.
However, manufacturing cells is complex and something the West has not yet mastered.
We have the knowledge, capability and passion for advanced manufacturing, but we lack the skills needed to transpose these capabilities into the battery domain.
This brings us to the ‘third way’ – one which utilises the strengths of the East and West. At Volklec, we are taking a somewhat novel approach by learning from Chinese experts and bringing the technology home, a strategy designed to establish British battery manufacturing based on this learned knowledge from the East, and in partnership technological leaders of the West.
Our approach of knowledge transfer from Asia to the UK, while collaborating with UK partners like the UK Battery Installation Centre (UKBIC) and the Faraday Institution, offers a pragmatic solution for building up a secure and resilient, sovereign battery supply chain.
The future of sovereign batteries
Strengthening domestic battery engineering and manufacturing capabilities unlocks:
- Supply chain resilience: Having local production reduces reliance on complex international supply chains. This mitigates the risks associated with global events, trade disputes, and logistical challenges.
- Economic growth and job creation: Establishing battery manufacturing facilities creates high-skilled jobs in research and development, engineering, and production. This stimulates local economies and enhances Britain’s industrial capabilities.
- Technological leadership: Investing in battery technology fosters innovation and positions Britain, as it is in the premium automotive sector, in the heart of the EV sector as well.
- Innovation: Enabling our heritage-rich universities to continue innovating across the entire value chain of batteries/cells and also providing them a true to route to industrialisation and the market.
Battery manufacturing will play an increasingly pivotal role in the UKs industrial strategy. By establishing domestic capability to design, manufacture and scale up homegrown energy and power cells, the UK can gain control over a technology that underpins some of its strongest sectors and ultimately power a more independent, resilient future for UK manufacturing.
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