How did Britishvolt go from charged startup to ‘life support’ patient?

Proposed Blyth battery factory attracted serious backers despite founders’ lack of expertise

When Britishvolt started gaining momentum with its plan to build a giant battery factory in north-east England, its timing could barely have been better. The then prime minister, Boris Johnson, was on the lookout for big projects that could bring jobs to poorer areas of the country and burnish his green credentials.

Britishvolt, with its ambition of making hundreds of thousands of batteries a year to power the switch to electric cars from the internal combustion engine, fitted the bill. But less than a year after Johnson praised the “absolutely amazing investment” in parliament, after promising £100m in government support, Britishvolt’s dreams are in jeopardy, with the company considering entering administration.

The startup was, on Monday evening, still in talks with potential white-knight investors. However, a source with knowledge of the situation said questions over the status of the government funding – which was dependent on Britishvolt securing expensive equipment – had been an issue for some potential suitors.

An insolvency process would probably result in about 275 people being made redundant. A skeleton staff of about 25 would stay around to turn out the lights at a three-year project that had promised to create as many as 3,000 jobs.

Britishvolt was incorporated on New Year’s Eve in 2019 by the Swedish businessmen Orral Nadjari and Lars Carlstrom. They set about drumming up investment and media coverage despite starting with no track record with the technology, no source of the £3.8bn in funding they estimated was required and – crucially – no guaranteed customers.

Nevertheless, Britishvolt did manage to attract serious backers and genuine interest from major car companies. It signed memorandums of understanding with the British sports car brands Aston Martin Lagonda and Lotus and got to the point of delivering prototypes of the battery cells it hoped to make – albeit made in the government-funded UK Battery Industrialisation Centre rather than in its own facility.

On the investment side too, Britishvolt attracted serious backers from among the FTSE 100’s blue-chip companies: Glencore and Ashtead both made equity investments worth tens of millions of pounds apiece, while Tritax, a property investment company owned by abrdn, said it would eventually provide £1.7bn to construct the factory building near Blyth in Northumberland.

Yet the company faced mounting difficulties as it spent heavily to develop its technology, to attract senior people and to start construction of its factory. Over the summer, the funding pressures became so acute that it was forced to put the project on “life support” to conserve cash.

Both of its co-founders had departed by August this year. Ex-Ford executive Graham Hoare led an effort to professionalise the operation, amid questions over extravagant practices within the startup, revealed by the Guardian. They included leasing a seven-bedroom £2.8m mansion with an indoor swimming pool and Jacuzzi for executives, hiring a Dubai-based fitness instructor to conduct yoga classes for staff over video, and travelling in a private jet owned by one of its billionaire shareholders.

The proposed site is still a muddy field, albeit with some important earthworks having been carried out. However, there is still thought to be significant interest in the property, whether or not Britishvolt survives.

India’s Tata Group, the owner of British carmaker Jaguar Land Rover (JLR), is among the companies considering purchasing it, according to several sources with knowledge of the talks. Tata did not respond to requests for comment.

A Tata purchase would answer one of the big unanswered questions in the UK car industry: where will JLR source its batteries? A Tata deal would also mean all is not lost for an area of the UK that had been hanging on to hopes of an industrial revival.


Jasper Jolly

The GuardianTramp

Related Content

Article image
UK-backed battery firm Britishvolt considers entering administration
Company struggling to find investors willing to fund effort to build giant £3.8bn ‘gigafactory’ in north-east

Jasper Jolly

31, Oct, 2022 @10:58 PM

Article image
Battery startup Britishvolt enters administration as rescue talks fail
Staff told majority of firm’s 300 employees would be immediately made redundant on Tuesday morning

Alex Lawson and Jasper Jolly

17, Jan, 2023 @1:28 PM

Article image
Britishvolt staves off collapse with five weeks of funding and steep staff pay cut
Mining giant Glencore stumps up cash as EV battery startup seeks buyer or investors to avoid administration

Mark Sweney and Jasper Jolly

02, Nov, 2022 @12:33 PM

Article image
Northvolt v Britishvolt: clarity v confusion in the great electric car battery race | Nils Pratley
Fast action in global gigafactory race is happening outside UK, as Swedish pacesetter shows

Nils Pratley

11, Jan, 2023 @1:05 PM

Article image
UK battery startup Britishvolt in talks to sell majority stake
Company says it is hoping to secure long-term funding so it can build ‘gigafactory’ in Blyth, Northumberland

Jasper Jolly

09, Jan, 2023 @1:26 PM

Article image
Britishvolt secures £40m investment for electric vehicle battery factory
Startup to be based near Blyth is regarded as key to prospects for the UK’s automotive industry

Jasper Jolly

15, Feb, 2022 @12:48 PM

Article image
Britishvolt scraps plan for second factory in Canada
Troubled startup battery maker formally abandons long-shot plan to build 60GW plant in Quebec

Jasper Jolly

27, Nov, 2022 @4:39 PM

Article image
Britishvolt gets £100m boost to build UK’s first large-scale ‘gigafactory’
The deal to build an electric car battery plant near Blyth will bring up to 3,000 jobs to the area by 2028

Jasper Jolly

21, Jan, 2022 @12:01 AM

Article image
UK faces ‘gigafactory gap’ that could stifle its EV industry, say MPs
Business committee tells government it must get more investment into sector to avert decline

Jasper Jolly

21, Nov, 2023 @12:01 AM

Article image
Britishvolt: how Britain’s bright battery future fell flat
Startup that hoped to transform UK car production was once valued at more than £800m, but collapsed worth a tiny fraction of that

Jasper Jolly

20, Jan, 2023 @4:49 PM