The UK startup Britishvolt has gained new investment worth £40m from Glencore in the latest stage in its ambitious plan to build one of the UK’s only large-scale battery factories.

It is aiming to treble its funding with £200m in a third funding round, with Glencore serving as the anchor investor. The FTSE 100 miner has already invested millions of pounds in Britishvolt in earlier funding rounds that valued the battery company at more than $1bn (£740m).

The battery factory project is seen as key to the prospects for the UK automotive industry as it moves away from internal combustion engines and embraces battery electric vehicles with zero carbon emissions from the exhaust.

Global battery supply is dominated by manufacturers in China, Japan and South Korea, but Europe and the US are racing to catch up.

The UK government has already backed the Britishvolt project with £100m from its automotive transformation fund, which aims to prevent the car industry and thousands of jobs moving elsewhere. Britishvolt is developing the battery technology before a factory is built at the government-funded UK Battery Industrialisation Centre in Coventry.

It has already carried out preparatory work on its site near Blyth in Northumberland, with construction due to start in April. The construction of the site has been backed by Abrdn, an institutional investor formerly known as Standard Life Aberdeen, and Tritax, a property investor part-owned by Abrdn, in a sale-and-leaseback agreement.

That deal will eventually be worth £1.7bn to fund the factory, the required infrastructure such as delivering the large amounts of energy needed to make car batteries, plus a supplier park and rail connection alongside the main site. The money will be delivered in tranches as the project develops.

Britishvolt was founded in 2019 by Orral Nadjari, a former investment banker. It has so far raised about £100m and it is in talks with Canada’s government over using the same model there. Its latest fundraising efforts will be led by the US investment banks Bank of America and Citibank alongside the London investment bank Peel Hunt, with another bank, Lazard, hired as a financial adviser.

Four separate automotive manufacturers, including the sports car maker Lotus, have signed memorandums of understanding with Britishvolt. It said this represented cumulative demand for batteries with 7 gigawatt hours of capacity by 2024 and 2025, a significant portion of the 30GWh it is planning to build annually – although the agreements do not guarantee battery orders.

Kasra Pezeshki, Britishvolt’s chief investment officer, said: “We are increasingly excited by the number of potential growth and investment opportunities available to the business. Our interactions with the capital markets and customers show that demand for low-carbon, responsibly manufactured batteries is rapidly growing day by day.”

The UK has only one other firm commitment to build batteries in the country: a major expansion of Envision’s plant in Sunderland that was built to serve the Japanese carmaker Nissan’s factory. Projects in Coventry and Somerset are also seeking investors.