Major blow for the north-east ... and Britain
The former CEO of Aston Martin, Dr. Andy Palmer, has warned that unless the UK ramps up electric vehicle battery production, the entire UK automotive industry faces a bleak future.
Palmer’s comments on Twitter come in the wake of the news on Tuesday (January 17) that the EV battery start-up Britishvolt had entered administration after failing to secure emergency funding.
Palmer said a fundamental “mismatch” exists between the UK government’s current plan to ban the sale of petrol and diesel cars by 2030 and the lack of an industrial strategy to achieve that goal.
Administrators from the accounting firm EY were appointed to Britishvolt on Wednesday following the loss of 200 jobs at the start-up.
Britishvolt had planned to build the UK’s first “gigafactory” battery production facility on the Northumberland coast near Blyth, with construction due to begin in 2023.
The factory, Britishvolt said, would directly employ some 3,000 people, with 5,000 more jobs likely created in the wider supply chain.
With the collapse of Britishvolt, UK-based battery production only represents a “small fraction” of the industry’s needs.
“The consequences of not correcting course will be the continuing demise of our automotive manufacturing capability,” he tweeted, “as car makers move to Europe or elsewhere, where battery capacity is being rapidly deployed as a matter of economic priority.”
The consequences of not correcting course will be the continuing demise of our automotive manufacturing capability as car makers move to Europe or elsewhere, where battery capacity is being rapidly deployed as a matter of economic priority,
— Dr. Andy Palmer (@AndyatAuto) January 18, 2023
The hundreds of thousands of automotive batteries slated for annual production at the Britishvolt facility would supply a substantial portion of the UK automotive industry’s battery requirements in the future, according to the people behind the firm.
Interest from the car industry was strong, with memoranda of understanding signed between Britishvolt and both Aston Martin and Lotus to design, develop and devise ways to produce new battery packs and battery management systems.
The company’s plans have come to nought and the collapse brings to an end months of uncertainty for the financially-troubled firm that had been on the verge of calling in the administrators in November. It secured a short-term £5m loan from the commodities and mining giant Glencore (an existing investor in Britishvolt) aimed at providing a lifebuoy for the company until it could secure more solid long-term investment, though this was not enough to keep the project alive.
Although Britishvolt had been promised £100m in government funding through the Automotive Transformation Fund, each tranche of funding was contingent on the company meeting certain milestones and commitments.
Towards the end of last year, the Business Secretary, Grant Shapps refused to allow the company to draw down £30m in bridging funding on the grounds that the firm had not secured long-term external funding.
Despite Glencore’s loan buying Britishvolt some time, a reported offer of £128m in funding from a group of Britishvolt shareholders, as well as a similar offer from an Indonesian-linked fund, DeaLab, fell through over the last few days. The firm had entered administration, EY said, “due to insufficient equity investment for both the ongoing research it was undertaking and the development of its sites in the Midlands and northeast”.
Even prior to last November’s eleventh-hour reprieve for Britishvolt, however, all had not been well at the firm for some time.
The company’s proprietary modular battery technology was (and is) still in its prototype stage and according to The Times, one source close to Aston Martin said talks with Britishvolt over its technology had progressed slower than expected, and it had not received sample products it had requested.
One person with knowledge of Lotus’s dealings with Britishvolt said the company’s promises had lacked “substance” and that the sports car maker was likely to look elsewhere for its batteries.
The firm was haemorrhaging key staff, too, having lost both its CEO and founder, Orral Nadjari, as well as its Chief Financial Officer, William Reynolds, within the space of three months last year. Three directors departed the board in 2022, none having served for more than 17 months.
Following news of Britishvolt’s collapse, the government has said that it planned to work with the local authority and potential investors “to ensure the best outcome” for the factory site in Blyth.
- After reading about the winding up of Britishvolt, you may also like to check out all the car makers’ electric vehicle plans
- Wondering what are the best EVs right now? Check out our electric car reviews here
- Or read more about the agreement between Aston Martin and Britishvolt, signed last year
Keyword: Business leaders warn of bleak future for UK automotive industry in the wake of Britishvolt collapse