Tata Group’s UK gigafactory to produce cobalt and lithium-based batteries

The parent company of Tata Steel UK told Fastmarkets that it will produce nickel cobalt manganese (NCM) batteries and lithium iron phosphate (LFP) batteries at the site in Somerset in southwest England.

The gigafactory will provide UK-produced batteries for its Jaguar Land Rover subsidiary in Birmingham, central England, and for other vehicle manufacturers in the UK and across Europe, Fastmarkets understands.

The company said that production is expected to start in 2026 and the gigafactory will maximize its use of renewable energy.

“Our multi-billion pound investment will bring state-of-the-art technology to the country, helping to power the automotive sector’s transition to electric mobility, anchored by our own business, Jaguar Land Rover,” he added.

For Europe’s car manufacturers, there is currently a clear preference for cobalt-based NCM batteries, although the use of lithium-based LFPs is growing, according to Fastmarkets researchers.

In China, meanwhile, LFP batteries are taking over from NCM batteries, with the country’s output of LFPs rising by 11.64% month-on-month in June, while its output of NCM batteries declined by 4.48% in the same month, according to data from China Automotive Battery Innovation Alliance (CABIA).

But despite the growth in demand for LFP batteries in China and in Europe, Fastmarkets researchers forecast that the electric vehicle (EV) industry will account for 47% of the total demand for cobalt by 2030.

Even so, cobalt’s high and volatile prices, along with environmental and social governance (ESG) concerns, have led car manufactures to reduce the amount of cobalt used in NCM batteries, sources said. And demand for cobalt from consumers is currently fairly low, due to the quieter market during the summer holiday.

Nonetheless, the tighter cobalt hydroxide market and more interest from investors have pushed up cobalt prices in recent weeks.

Fastmarkets’ daily price assessment for cobalt standard grade, in-whs Rotterdam was $16.30-18.50 per lb on Wednesday July 19, up from $14.85-17.00 per lb on July 6.

Fastmarkets’ twice-weekly price assessment for cobalt hydroxide payable indicator, min 30% Co, cif China, % payable of Fastmarkets’ standard-grade cobalt price (low-end) was calculated at 65-68% on Wednesday, continually up from 51-53% on May 24.

Fastmarkets researchers estimate that the supply/demand balance for lithium carbonate equivalent (LCE) will show a deficit of 72,400 tonnes for 2023 as a whole, with the deficit increasing to 82,690 tonnes in 2024.

Fastmarkets’ daily price assessment for lithium carbonate 99.5% Li2CO3 min, battery grade, spot prices, cif China, Japan & Korea was 38-40 per kg on Wednesday, flat from the previous session.

And Fastmarkets’ daily price assessment for lithium hydroxide monohydrate LiOH.H2O 56.5% LiOH min, battery grade, spot price cif China, Japan & Korea was $40-47 per kg on Wednesday, similarly flat from the previous session.

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