UK gigafactory dream will ‘fall over’ without vital warehouse space, warns report

An electric car charger

Building a new generation of gigafactories to achieve Britain’s net zero goals will need an area three times the size of the City of London to support a vast supply network or risk failure, according to a new report.

Savills forecasts that the UK will need up to 50m sq ft of new warehousing space by 2040 to house key suppliers to the new battery factories, requiring some 2,500 acres of land, three times the size of the Square Mile.

The estimates come as the Government plans to transition to zero emission road transport by 2035, following the banning of the sale of new petrol and diesel cars by 2030. Its research pinpointed South Wales and the North East – rich in brownfield land vacated by former heavy industries and key targets for the Government’s levelling up ambitions – as the most likely areas for gigafactories.

But the consultant stressed that both regions lacked industrial space to support suppliers and warned that South Wales would need 40pc more warehousing to support a potential gigafactory.

Kevin Mofid, head of industrial research at Savills, said: “The gigafactory itself is only half of what needs to be done. It’s the wider supply chain. If as looks likely, the gigafactories are going to be in places that don’t normally have a lot of warehouse development, these brownfield regeneration areas, the wider property market needs to understand this and be prepared to react to it. Because if the gigafactory can’t get their suppliers, the whole thing falls over as well. It’s a big issue.”

So far only one company, start-up Britishvolt, has gone public with ambitions to build a new electric battery factory in Blyth, Northumberland, although Nissan is to build an extension to its Sunderland plant for batteries.

The Faraday Institution, which estimates the UK needs seven gigafactories, forecasts declining car production and the potential loss of some 114,000 existing automotive jobs by 2040 without domestic battery production.

Under the terms of the UK’s trade deal with the European Union, 55pc of the value of an electric car must be of UK or EU origin to qualify for tariff-free trade by 2027, increasing the pressure to lift domestic supply.