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The global battery market is expected to grow by nearly $50 billion a year over the next decade as the demand for electric vehicles grows and the need to switch to clean energy sources increases. Battery technology will play a vital role in powering the cars and storing the energy, that for example, wind turbines or solar panels produce. More and more homes and buildings will be upgraded to incorporate energy storage facilities.

The battery industry has to respond to this demand.  More research and development is required to reach the increased requirements for a greater range for electric vehicles, or the ability to produce cells cheaper to reduce costs. To deliver this, battery technology firms which are at the forefront of innovation need continued access to capital.  More importantly, patient capital which understands that while the revolution is underway, until the technology scales and consumer and business demand peaks, returns maybe some time away. The potential, however, is enormous.

The UK is one of the world leaders in battery technology, and it is vital that it remains at the forefront in the face of considerable global competition.  The north east is already a world-class hub with car manufacturers like Nissan working closely with local universities and businesses, like Hyperdrive Innovation to develop the latest in battery technology. We have received support from Government agencies like Innovate UK and the Advanced Propulsion Centre and recently set up a manufacturing partnership in Asia to help meet the demand for our technology.  We are ambitious to do more, but the competition is fierce.

Around the world, governments are pouring funds into the industry. For example, Australia’s Government is investing more than $200 million.  In the UK, the Government set up the Faraday Challenge – a £246 million commitment until 2021 for battery development. The Faraday Challenge has been very successful, and Hyperdrive has benefitted from funding for some projects. However, it backs only a finite number of projects and is time-limited.   One of the frustrations from an SME perspective is that the application process can prove very time consuming, a constraint on available resources and at times, expensive.

Government funding is one thing, but there also needs to be private sources of capital. When you consider that China has a battery manufacturer, CLS, worth more than £11.5 billion, than the scale of the competition is evident.  Recently Gore Street Energy Storage, an investment company striving to be the UK’s first listed ‘battery’ fund, cut its fund-raising target to £35 million from £100 million. Restrained Government funding makes private sources more critical.

For the UK to remain competitive, we need to look at ensuring that the industry can rely on long-term sources of funding.  It would be great to understand what the Government’s plans for the sector are, especially post-Brexit and are there ways, perhaps through the tax system to encourage more private capital into the industry?

Britain is a world leader in battery technology, and there is an opportunity for businesses to scale to become global players.  It is essential that companies, governments and investors plan and work together to make sure we continue to compete on the world stage.