The Government could decide this summer if it is ready to back a £100 million gigafactory that would create up to 600 jobs in central England – or whether the project will go over to Europe.
The boss of Intelligent Energy said his company was desperate to commit to a UK manufacturing base as demand for its technology grows.
But he said the plans would need millions of pounds of government support – and said talks were ongoing with the Department for Business, Energy & Industrial Strategy (BEIS).
Chief executive David Woolhouse said the business was running out of manufacturing space at its Loughborough headquarters.
It needs a new factory to make hydrogen fuel cells that will power the next generation of cars, planes, trucks and drones.
The alternative to investing in the UK, Mr Woolhouse said, would be to locate it in Poland or Germany, where set-up costs, including land prices, were cheaper, and where state interest was high.
The tech company has spent years developing low carbon fuel cells which, he said, will be the next big thing in the green revolution.
It already deals with global players such as BMW – to power driverless vehicles that move pallets around its Leipzig production line – GKN Aerospace and bus builder Alexander Dennis.
One of the biggest orders so far has been to provide standby power to support the grid in the US, and the business is in talks with the people behind plans for a mini-power station in Korea.
The Intelligent Energy – or IE – team is also working on powering a prototype car engine in the UK and on trials with Shell for pipeline inspections in the US.
Mr Woolhouse said there probably less than 20 companies doing what they were doing in the transport sector, with IE the only one of its kind in the UK.
He said the new production facility would have capacity to make 10,000 car fuel cells a year, each creating enough to power a 100 kilowatt car engine –the equivalent of 1 gigawatt of electricity a year.
The business hosted representatives from the German state of Saxony last month to discuss its options – if support to stay in the UK isn’t agreed.
Either way he said it would keep its HQ in Leicestershire.
He said: “The world of fuel cells has completely changed in the last few years. From being a technology that would have its day in four or five years’ time, it is absolutely everywhere now.
“If you’ve got a hydrogen car you fill it up once a week and it costs about £10 for the fuel, with zero emissions. Anywhere you use a battery or a combustion engine you can use a fuel cell.
“They are now common-place in warehouses and buses in some cities. Toyota and Honda both have fuel cell cars.
“At IE we are working on a broad range of products –for drones that are used for pipeline inspection and parcel delivery on the one hand, and we have a programme with GKN to develop a 10 megawatt scheme for long-distance flight.
“It was always a brilliant technology looking for a home to go to, and that has changed in the last four or five years. We don’t do project work like we did before. Now we have a standard range of projects you buy off the shelf and you just phone up and get it delivered.
“We can’t recruit people fast enough and we are at 210 today with a couple of people joining every week – engineers and production people, commercial people. Nearly all of those are in Loughborough with a handful in the US, Japan and China.
“We have production capacity here for sales of about £30 million. Previously manufacturing was outsourced but we make everything that we are going to sell here now.
“£30 million is nowhere near enough for us, which is where the gigafactory comes in because we are going to outgrow our space here on the university campus pretty quickly.
“Our MP Jane Hunt has been super helpful and we’ve had her lobbying the Government for investment.
“We’ve been mulling over where to site it and have been speaking to our Government about supporting us here in the East Midlands.
“The Saxony government would also like to site it there and we are speaking to a region in the south-west of Poland too who are keen for us to go there and a couple of other regions in Germany.
“Germany is one of the most advanced hydrogen economies in the world, on a par with Japan, Korea and California. So from the point of where our customers are likely to be, Germany is quite a good place to build manufacturing.
“But we are an East Midlands company and are really keen to build our first big factory here, and are working with BEIS, with the help of Jane, to try and get the support we need to build it in the UK.
“We’ve been speaking with them for a year to try and get some support from the Automotive Transformation Fund. It’s a fair proportion of the £100 million we need to spend.
“We will put most of the money in and we just need enough to cover how much cheaper it would be to build something in Germany, where land is so much cheaper. The market is there too, so we are speaking to the Government here about helping to bridge that gap.
“We expect to know within the next couple of months. We have our plans ready for whether it’s a yes or no from the Government. If we are going to build a gigafactory in the UK it has to have that Government support.
“It would be a big commitment from IE to commit that kind of money in the UK. We are a UK company with a UK owner and we are desperate to commit to UK manufacturing, we just need the Government to come with us.
“The factory would be manufacturing for planes, trains and automobiles really – literally for trains where you can’t have overhead lines, for the aerospace industry which is looking for a long-term solution for decarbonisation.
“I think step-by-step fuel cells will be the key technology in the air. I think trucks will be majority fuel cell, buses will be a fair proportion and lots of people predict about a quarter of cars will end up fuel cell.
“In terms of battery manufacturing for vehicles in the UK, the country is too late. Everyone else has lots of battery factories and we are trying to build our first one.
“So what we keep saying to BEIS and the Government, as a country, is let’s not make the same mistake again. Let’s not be left saying in 10 years’ time, why-oh-why did we not start building fuel cell factories 10 years earlier.
“The fuel cell world is taking off exponentially and the time to start investing in capacity and capability is absolutely now.
“When we put that argument to the Government there’s absolutely no reason why they shouldn’t support us.
“I would be extremely disappointed if they didn’t.
“It’s only us doing this. Otherwise we’d be asking a German or American company to invest in our country. We are British owned with brilliant products and an ambition to grow quickly.
“The ball is in the Government’s court.”
