• UK Battery Sector in Jeopardy as Britishvolt Enters Administration

Fuel for Thought

UK Battery Sector in Jeopardy as Britishvolt Enters Administration

Jan 17 2023

On Tuesday morning, employees at Britishvolt, a start-up interested in manufacturing batteries for electric vehicles in the UK, were informed that the young firm would be entering administration and that the majority of staff would be made redundant. For those unfamiliar with Britishvolt’s history, this collapse has been almost a year in the making – and will cast doubt on Britain’s ability to become a major player in this emerging sector.  

In 2020, Boris Johnson’s Conservatives set up the Automotive Transformation Fund (ATF), making capital available to those entrepreneurs and start-ups looking to make some headway in markets relating to electric vehicles. Incorporated in 2019 and passing through a short series of executive changes, Britishvolt was awarded £100m in funds from the ATF to begin building its ‘gigafactory’ in Blyth, Northumberland, which, in the 2019 general election, returned a Conservative MP for the first time since its founding. It's clear that the Conservatives were eager to repay the favour, with then PM Boris Johnson calling the investment a “levelling up opportunity”, a sentiment echoed by then Business Secretary Kwasi Kwarteng MP who considered the project to be “exactly what levelling up looks like”. This new plant intended to produce batteries for over 500,000 electric vehicles each year, a significant boost to the UK’s capabilities. 

To complete the project, Britishvolt would require around £3.6bn in investment – and after getting the government’s seal of approval, it managed to drum up an extra £1.7bn in private backing. Of course, both the government and these private financiers only agreed to this investment with conditions. By late 2022, it was reported that the government felt their conditions were not being met. Speaking recently, in reply to a question from the chair of the Business, Energy and Industrial Strategy Committee, Kevin Hollindrake MP, a Conservative, revealed that: "There were clear milestones we expect anybody who's received public money to hit and we are looking at the situation very carefully to make sure they are." As a result, a request made by Britishvolt for an advance of £30m was refused by the government in October, throwing the fledgling firm into financial uncertainty as, unsurprisingly, private backers had promised funds on condition that the government’s pledges were paid in full.  

So, here we are. The board of Britishvolt is believed to have decided on Monday that there were no viable bids to keep the company afloat. 

From 2030, there will be a ban on the sale of new petrol or diesel cars in the United Kingdom, prompting an entrepreneurial scramble to either renovate existing factories or build all of the new infrastructure required to make this transition. Industry experts say the UK will need several battery factories to support the future of UK car making as petrol and diesel engines are phased out over the next decade. At time of writing, the UK has just one plant, whereas 35 new units are either planned or under construction in the EU. With the collapse of Britishvolt, then, Britain appears to have given up the ghost – but industry and government sources have informed the BBC that they remain confident that the Port of Blyth factory will be built. 

The administrators of the bankruptcy, EY, have described the collapse of Britishvolt as "disappointing" and clarified the support that all redundant staff are receiving. Joint Administrator and Partner at EY, Dan Hurd has bemoaned the fact that the firm had offered "a significant opportunity to create jobs and employment, as well as support the development of technology and infrastructure needed to help with the UK's energy transition.” The collapse of Britishvolt is a setback, but it's important that the UK continues to invest in and support the development of battery production capabilities.


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