Great news for NE England in plan for much needed first gigafactory, ie electric car battery plant, on site of old Blyth power station. PM visited today too. Obviously less so for Bro Tathan, Wales, referred to as preferred site by company even this month https://www.bbc.co.uk/news/uk-wales-55262400

there is a lot of Brexit/ rules of origin/ econ/ climate/ industrial/ state aid policy to consider in mapping out what happens with this significant scheme and not lost on anyone that Blyth is one of the totemic red wall seats that PM won... Gigafactory in Conservative manifesto

First of all - 2030 phase out of combustion engines helps make case for massive investment in a facility such as this. That tough decision creates market certainty that hundreds of thousands of UK-driven cars will need such batteries... Blyth location helps with renewable energy

Second - type of Brexit matters here. Uncertainty dried up investment and risked the UK missing out on wave of electrified investment from majors, particularly risk of No Deal tariffs.

BUT even in a deal, EU was rebuffing UK asks on preferential rules of origin esp for batteries

3. Auto industry sources assume the market for this factory will be domestic UK cars. 300k batteries a year is the targeted capacity by 2027. Even for a purely domestic market, (ie factories building for UK not export) that would need 2 or 3 such factories

4. EU as a specific policy aim wants to reshore electric battery production to the bloc, from Asia, as part of “strategic autonomy” in spite of what its car manufacturers want and have contracted for... likely trade barriers here, so this wont be Nissan ‘factory for Europe’ model

5. Government trying to attract big East Asian giants that already run Gigafactories, as well as showing Tesla round some sites last year, without success. Musk mentioned Brexit when asked. Batteries make up 40% of cars value, factory location really matters for export....

6. So in order for a £2.6bn investment to work for a new start up, a significant amount of Government investment will be required, and that is acknowledged by the company - eg applied to £1bn Automotive Transformation Fund... but just how much...

7. Which brings us back to... Brexit/state aid...

On one hand this type of plan is perhaps the prime candidate for a vat of UK state aid, and surely that’s why the UK wants to be free of restrictions?

On the other Germany already giving billions, so how is it really restricted?

correction!... somewhat curiously

It’s not in Blyth Valley/ red wall, the site of the proposed Gigafactory is in Ian Lavery’s neighbouring seat of Wansbeck... the company went to some lengths though to quote and to thank the new Conservative MP, and in turn the PM visited area..

announcement press release goes to some lengths to praise neighbouring Govt MP, including a quote - perhaps a new norm in a world of British state aid...

unions welcome it, with some caution tho and call it “Wansbeck Gigafactory” https://unitetheunion.org/news-events/news/2020/december/unite-welcomes-britishvolt-plans-for-a-gigafactory-for-wansbeck-but-warns-pm-not-to-play-with-the-hopes-and-aspirations-of-people/