Byrne, Brussels, and Beijing!

November 23, 2023

FirstGroup and Hitachi ZeroCarbon have formed a JV, named NextGen AssetCo, to purchase up to 1,000 electric bus batteries over the next 3 financial years. This 50/50 JV will provide these electric buses to First Bus via an operating lease, initially over an 8-year period, with the option to extend this lease by 2 years at no cost. Hitachi ZeroCarbon will provide the batteries and the charging management services for the 1,000 buses via the JV. The first 400 batteries are pencilled in to be procured and deployed to First Bus in FY24, with the remaining 600 coming in the subsequent 2 financial years. Interestingly, FirstGroup has stated that the batteries will retain 75% of their residual values.

A report by the Business and Trade Committee has stated that the UK is falling behind in EV battery production, in comparison to its international peers. To facilitate the EV ramp-up, sectors will require 100GWh of battery manufacturing capacity by 2030 and this will need to increase to 200GWh by 2040. The report highlights the lack of gigafactories in the UK, and although this is not a surprise, the report stresses greater political involvement via a strategic approach to incentives. Mr Byrne (Chair of the Committee) implores the UK to formulate and implement a 10-year strategy that focuses on subsidies, encouraging a competitive mix of battery manufacturers to locate in the UK to flesh out the local supply chain(s), gigafactories, tariff-free trade and long-term R&D incentives for the industry. We wholeheartedly agree with this message, and we hope the incumbent government will heed this Committee’s report recommendations. More details will be unveiled in the Advanced Manufacturing Plan and the Battery Strategy report which will be published later this week.

VinFast has announced that customers will be eligible to receive $100-$300 for service delays that last over 3 days. The payment amount will be either in cash or in service vouchers however this new initiative is another method VinFast is using to distinguish itself from its peers. Interestingly, the VinFast management is continuing to focus on post-sale services, as the company also offers a 10-year, 120,000-mile warranty. This is good news for (USA) consumers as it is another reason to incentivise the transition to electrification.

French Foreign Affairs Minister Catherine Colonna will be visiting China next week in a bid to smooth relations between the two countries. This is being driven by the recent European anti-subsidy probe into Chinese EVs which France supported. Minister Colonna will attempt to initiate conversations which centre around respecting EU sovereignty and striving for a balanced relationship. Essentially France (nor any other EU country) does not want to engage or get caught up in a tit-for-tat tariff war, which will harm both sides however the EU has more to lose (in the short term). Furthermore, if this (potential) tariff war escalates, then French OEMs, such as Renault and Stellantis will suffer.

Stellantis and CATL have signed an MoU which states that CATL will supply LFP battery cells and modules to power Stellantis’ EVs in Europe. There are also talks about a potential JV regarding lithium-iron-phosphate battery production. Bear in mind that lithium-iron-phosphate batteries are starting to become very popular as they are cheaper to produce and more stable than nickel-based batteries. However, the trade-off is that they have a shorter driving range due to lower energy density. This strategic partnership will certainly help Stellantis build out its battery value chain.

The ACEA has published data which states that for the 15th consecutive month passenger car deliveries, in Europe, have increased due to increased demand for battery-electric cars. Overall registrations hit 1.04m, which is a 14% increase YoY, with pure EVs increasing by 30% to 158,439 units overtaking diesel registrations of 109,998 (a decrease of 15%). However, upon closer inspection, these figures hide the stagnation taking place in Germany. In France, although registrations increased by 22%, these were driven by subsidies which offset lacklustre EV demand. Europe has had a turbulent macroeconomic climate lately and this has dampened EV appetite.


Advanced Electric Machines, a UK-based startup, has announced it has raised £23m in a Series A round, which L&G General Capital and Barclays Sustainable Impact Capital led. The capital will be used to scale up its production of recyclable EV motors.

Arrival has secured $50m in the form of a bridge form, allowing the company to keep afloat long enough to explore a potential sale. This bridge loan is being provided by Antara Capital and Highbridge Capital Management with a term of 120 days. This additional liquidity allows Arrival to sell the company so it can pay its creditors.

Komatsu, a Japanese company that focuses on manufacturing vehicles and heavy equipment, has announced it will be acquiring American Battery Solutions (ABS). Komatsu focuses on sectors such as construction, mining, forestry and heavy industrial, which are the hardest to decarbonise. This acquisition will allow Komatsu to ramp up its development and production of battery-powered EVs in-house. This is due to ABS specialising in lithium-ion battery systems for on and off-road vehicles.