Leading figures have discussed the idea of establishing “gigafactories” in the UK to provide for the growing electric car industry. But what is a gigafactory and can it actually help?
Hirbod Assa, Senior Lecturer in Finance and Fintech in Kent Business School explains:
‘In addition to governments incentivizing electric cars, the main reason for their rapid popularity growth is better technology.
‘They are quiet, possess better acceleration at lower running costs, and give off no pollution. Electric cars introduce a more sustainable technology that can rely on renewable energies, unlike the internal combustion engine cars that only rely on fossil fuels. Electric cars are fed by rechargeable batteries.
‘Though the past few decades have seen technological advancement make electric cars significantly more cost-effective and energy-efficient, there are still challenges related to their batteries. Overcoming these challenges necessitates access to better battery technologies.
‘In 2016, Tesla introduced a new gigantic factory, a “gigafactory”, to produce rechargeable batteries from input resources to the finished product. Gigafactories can make the electric car industry more cost-efficient, playing a similar role to the refineries for the traditional petrol cars. Given the growing demand for electric cars, the whole world is investing more in gigafactories.
‘The UK, one of the major markets for electric cars, is exploring this opportunity. Gigafactories can help the industry’s cost efficiency and create direct and indirect jobs to compensate for the expected 100,000 future jobs losses due to the technological transformation.
‘The additional benefit of such technological transformation will help the UK reach the international goals to limit the global emission, as well as providing “energy independence” to the post-Brexit Britain relying on its abundant renewable energy sources.’
Hirbod Assa, is Senior Lecturer in Finance and Fintech at Kent Business School.
Click here to read Hirbod’s take on How the UK can Keep it’s Fintech Crown.