Britishvolt, an electric car battery company once praised by former Prime Minister Boris Johnson, has fallen into administration and made the majority of its 300 staff redundant.
The company had been promising to build a £3.8 billion gigafactory producing batteries for electric cars in Blyth, Northumberland.
But the project ran into serious difficulties months ago as it started to run out of cash before it had even cleared the site in preparation for construction.
The company has now appointed administrators at EY-Parthenon after failing to raise enough cash for its research and the development of its Cambois site.
“The company has entered into administration due to insufficient equity investment for both the ongoing research it was undertaking and the development of its sites in the Midlands and the North East of England,” EY-Parthenon said in a statement on Tuesday.
The administrators will “implement an orderly closure and winding down of the company’s affairs” and the majority of the firm’s employees “have been made redundant with immediate effect,” said the statement.
Dan Hurd, joint administrator and partner at EY-Parthenon, said: “Britishvolt provided 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. It is disappointing that the company has been unable to fulfil its ambitions and secure the equity funding needed to continue.
Much-Trumpeted Venture
Britishvolt expected to make 300,000 battery units a year, fulfilling the demand for around one in four vehicles sold on the British market.The plan was to develop the 95-hectare site, where a coal-burning power station once stood, and use Norwegian hydro-electric power transmitted 447 miles under the North Sea via the world’s longest inter-connector.
When it was first announced in late 2020, it was hoped the investment would be comparable in the North East to that of Nissan in Sunderland in the 1980s.
In January 2022, then-Prime Minister Boris Johnson trumpeted the thousands of skilled jobs the Britishvolt gigafactory was expected to create.
Announcing the government was backing the ambitious project with cash from the Automotive Transformation Fund (ATF), Johnson said Britishvolt would employ 3,000 people directly, with another 5,000 in the pipeline.
Johnson said the plant would become part of the UK’s “global green industrial revolution.”
But Britishvolt simply could not raise enough cash to keep going. The company had been promised £100 million in government funding, but to protect taxpayers in the event that the firm failed, that money was only available if the company met certain milestones, which it never did.
In recent months the business has tried to find enough cash from private investors to stay above water, including mining giant Glencore. But its efforts fell short.
‘Disappointed’
Britishvolt’s failure marks a setback for Britain’s car sector as industry officials and experts see domestic EV battery plants as essential to keep UK car production from shifting to mainland Europe.To comply with trade requirements with the European Union, a large part of an EV by value must be built in Britain to avoid EU tariffs.
A spokesperson for the Business Department said: “As part of our efforts to see British companies succeed in the industry, we offered significant support to Britishvolt through the Automotive Transformation Fund on the condition that key milestones—including private sector investment commitments—were met.
“We remained hopeful that Britishvolt would find a suitable investor and are disappointed to hear that this has not been possible, and therefore no ATF grant has been paid out.
“Our thoughts are with the company’s employees and their families at this time, and we stand ready to support those affected.
“The UK is one of the best locations in the world for automotive manufacturing, and we want to ensure the best outcome for the site. We will work closely with the local authority and potential investors to achieve this.”
The main opposition Labour Party blamed the firm’s collapse on the Conservative government’s “long-term failure on industrial strategy.”
Labour’s shadow business secretary Jonathan Reynolds said: “The government’s long-term failure on industrial strategy means we’re losing the global race for electric vehicle battery manufacturing putting our world-famous car industry at risk.
“Under this government local communities are watching businesses shutting their doors, job opportunities going abroad, and investment leaving Britain.”
Darren Jones, the Labour chairman of the Business, Energy and Industrial Strategy Committee in the House of Commons, told the BBC that the government should be “much more closely involved” in supporting the electric vehicle sector.
