Britishvolt falls into administration, jeapordising plans for Gigafactory in Blyth
Battery start-up Britishvolt collapsed into administration on Tuesday (17 January), with emergency talks with investors regarding a rescue bid falling through.
The Financial Times reported on Tuesday morning that Britishvolt staff had been told by leadership that the firm had secured a takeover offer but that its creditors had rejected this offer. As such, it entered administration.
EY has confirmed that it has taken on the administration for Britishvolt, which had been seeking to develop a 30GWh Gigafactory on a 93-hectare site near Blyth to serve the electric vehicle (EV) manufacturing industry in the UK and beyond.
It was hoped that the £3.8bn Gigafactory would begin producing batteries next year and expand to full capacity – 300,000 battery packs each year – by 2028. But this will no longer be the case. The site is currently under construction, with planning permission having been granted in 2021, but works had been paused since late 2022.
BritishVolt announced earlier this month that it was in talks with existing and new investors, seeking to sell a majority stake in the company after it narrowly avoided entering administration late last year. It is clear that the talks were not successful.
EY has stated that Britishvolt had entered 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”.
“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,” said Dan Hurd, joint administrator and partner at EY-Parthenon.
“It is disappointing that the company has been unable to fulfil its ambitions and secure the equity funding needed to continue.
“Our priorities as joint administrators are now to protect the interests of the company’s creditors, explore options for a sale of the business and assets, and to support the impacted employees.”
Around 300 people were employed by Britishvolt and several UK-based broadsheet and tabloid news outlets are reporting that the majority of this workforce were made redundant with immediate effect on Tuesday.
BritishVolt had previously attributed its troubles to the economic shockwaves of Covid-19 and Russia’s war in Ukraine, plus the fact that the UK Government did not provide grant funding to the timelines it expected. The Government had pledged £100m of support to the Gigafactory and Britishvolt had requested a £30m advance last summer. This request was rejected and the Government pushed the request back to November 2022. It was subsequently delayed once more.
Britishvolt is yet to publish an official statement. There is also no official statement as of yet from the UK Government. The edie team will update this article if and when these are published.
The UK Government has already been urged several times to set more robust plans for growing the nation’s Gigafactory stock this decade, to avoid relying on imports and therefore missing out on opportunities for green job creation and international battery trade.
That is, of course, if the UK manages to attract EV manufacturers to return to its shores or to enter the market – and engage with them to promote the procurement of British-made batteries. Honda has already closed its plant in Swindon, Stellantis is ending car production at Ellesmere port and BMW will not use its plant in Oxfordshire to manufacture next-generation electric minis. Instead, the model will be built in China.
Green economy reaction
Responding to the news on Britishvolt’s administration, the Association for Renewable Energy and Clean Technology’s (REA) director or policy Frank Gordon said: “The news that Britishvolt has filed for administration is a real shame – this highlights the need for an effective UK industrial strategy and supply chain support, similar to the U.S.’s Inflation Reduction Act, to capture the huge opportunities of net-zero. Chris Skidmore’s Net Zero Review report made clear the opportunities and imperative of doing so just last week.
“Our thoughts are with the staff and affected families in the result of any redundancies and we hope that another player may take up this project as the location is widely seen as ideal for the production of batteries.
“The UK needs at least three such gigafactories and we must now urgently see progress towards this in order to get to net-zero.”
Friends of the Earth’s head of policy Mike Childs said: “This is yet another blow to building the clean, modern future we urgently need.
“The Government’s failure to develop more battery manufacturing risks leaving the UK in the slow lane while others race ahead to reap the jobs and other benefits that transitioning to a green economy will bring. Employment in automotive jobs in the UK could plummet unless more is done to put this country at the forefront of developing and building EVs.
“Rishi Sunak must heed [the Net-Zero Review] and do far more to develop the green industries of tomorrow, instead of backing the big polluters of the past.”
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