The lack of a domestic cathode active material (CAM) supply chain in the UK and Europe is emerging as one of the most pressing bottlenecks for the electric vehicle (EV) industry. While the focus has been on building cell and battery pack gigafactories, even mining and refining lithium, midstream materials like CAM, which accounts for more than 35% of the value of a lithium-ion battery, remain critically underdeveloped. This shortfall risks not only derailing UK and Europe’s EV ambitions, but also triggering trade penalties under post-Brexit Rules of Origin (ROO).

Altilium is breaking new ground. At our ACT 1 R&D Technology Centre and shortly our ACT 2 facility, we are currently the only company in the UK producing CAM. Our goal is to develop a CAM capability at scale, to meet domestic demand and become a cornerstone of a homegrown EV battery supply chain.

The Rules of Origin Roadblock

Under the EU-UK Trade and Cooperation Agreement (TCA), EVs must meet strict Rules of Origin to qualify for tariff-free trade. From January 2027, it is no longer enough to assemble battery packs in the UK or EU. The origin of the battery components, especially CAM, must also be UK or EU-based.

Without a local source of CAM, many UK- and EU-made EVs are at risk of being hit with tariffs as high as 10% when exported across the Channel. This poses a serious threat to the competitiveness of the UK automotive industry, which exported over 50% of its EVs to the EU last year.

Why CAM Matters

CAM is the heart of a lithium-ion battery, determining its performance, energy density, and cost. Materials like NMC (nickel-manganese-cobalt) and LFP (lithium iron phosphate) are processed into CAM before being integrated into battery cells.

It is also one of the most complex and energy-intensive parts of the battery manufacturing process, which is why most CAM today is made in Asia, particularly China. Without domestic production, UK and European gigafactories will remain dependent on imports, exposing them to geopolitical risk and breaking the ROO value chain.

The Supply Chain Risk

While the UK and EU is investing billions into cell and battery pack production, even mining of lithium and midstream refining, production of CAM has lagged far behind. On of the reasons is building CAM capacity is capital-intensive and takes time, typically 3–5 years to reach meaningful scale.

A shortage of CAM could lead to higher costs for EV manufacturers, delayed battery rollouts and a weaker position in global markets.

The Advanced Propulsion Centre, UK (APC) Q1 2025 Automotive industry demand forecast (attached) shows Cathode manufacturing is limited in UK and Europe region with significant deficit reported in 2035. The UK and EU will need to engage in resource diplomacy, develop local refining capacity and establish strategic partnerships to ensure supply.

Altilium’s Solution: A Circular, Domestic CAM Supply Chain

At Altilium, we are pioneering a new model for CAM production, one that is local, circular from recycled precursors and 74% lower carbon than the current China supply chain.

Using our proprietary EcoCathode™ technology, we recover over 95% of critical metals from end-of-life EV battery scrap and upcycle them into high-performance CAM, ready for direct reuse in new cells.

At scale, EcoCathode™ green technology could deliver CAM 20% cheaper than virgin materials (Strategy& and RWTH Aachen University, 2023), possibly giving a 5% lower EV cost, meaning faster adoption of clean transport in UK cities

This approach provides multiple strategic benefits:

• Meets ROO Requirements: Our UK-based CAM production ensures EVs made with our materials qualify for tariff-free trade.
• Reduces Import Dependency: We offer a domestic alternative to Asian CAM, enhancing supply chain resilience.
• Accelerates Green Goals: Our low-carbon process supports the UK’s net zero targets while reducing environmental impact.
• Scales with Industry Demand: Our upcoming ACT 4 commercial-scale facility will recycle 150,000 EV batteries annually, supplying up to 25% of the UK’s CAM demand by 2030.

A Call to Action

To secure the future of EV manufacturing in the UK and Europe, policymakers and industry leaders must act now to prioritise investment in CAM production, alongside gigafactories. Altilium is ready to lead this transformation, not just filling a gap in the battery supply chain, but we’re building the bridge to a cleaner, more secure and competitive Automotive Industry.