Battery startup Britishvolt Ltd. is going into administration in a blow to the UK’s hopes of developing a thriving electric vehicle industry.
(Bloomberg) — Battery startup Britishvolt Ltd. is going into administration in a blow to the UK’s hopes of developing a thriving electric vehicle industry.
The company, which hoped to build a multibillion-pound battery factory in northeast England, has selected accounting firm EY as its administrator and is letting go all but around 25 of its 300 employees, according to people familiar with the matter.
The moves come after talks with a consortium of potential rescuers faltered and mark the latest in a series of setbacks for Britain’s shrinking auto industry. The company submitted a filing for administration Tuesday at the High Court in London.
Backed by mining giant Glencore Plc, Britishvolt was viewed as a key part of the UK’s drive toward an electric-car manufacturing boom. Former Prime Minister Boris Johnson had hailed the company as a centerpiece of his ambitions for a “green industrial revolution.”
While the firm had signed outline agreements with Aston Martin Lagonda Holdings Ltd. and Lotus Cars, owned by China’s Zhejiang Geely Holding Group, it’s been unable to secure firm commitments for orders.
Related: The UK Car Industry’s Prospects Are Going From Bad to Worse
Britishvolt was in talks last week to be rescued at a valuation of £32 million ($39 million), 95% less than what it was worth just last year. EY is now expected to sell the closely held company’s assets, the most valuable of which likely is its Blyth factory site.
A spokesperson for Dentons, the law firm representing Britishvolt, declined to comment.
Britishvolt’s failure means the UK risks missing out on the global EV boom. The country has just one reasonably sized cell plant in operation, owned by China’s Envision Group, and has failed to attract investment in additional large-scale facilities.
EU Rules
Post-Brexit Britain also risks falling further behind the European Union in developing its EV industry, with battery plants being built across the bloc. Under so-called country-of-origin rules, carmakers will eventually have to source large parts of their EV supply chains from the UK or the EU or face hefty tariffs to sell cars in Europe.
The Blyth location is ideal for battery manufacturing, with ample space and access to clean energy. Britishvolt held talks late last year about selling the 93-hectare (230-acre) site, people familiar with the matter said at the time.
“This development was once the crown jewel of the government’s leveling up policy in the North East but is now in grave danger of collapsing,” said Ian Lavery, a member of parliament for Wansbeck. “Back in July Boris Johnson when he was the prime minister told me that the check was in the post to Britishvolt, but the reality is they have never received penny from the government.”
In August, Britishvolt postponed the start of production at its main factory site to mid-2025 from an original target of late 2023, citing rising interest rates, inflationary pressures and surging energy costs.
The company in November blamed the UK’s political instability for putting off investors, adding that its request for £30 million from the UK government had been rejected. Britishvolt’s founder Orral Nadjari announced his departure in August, with former Ford Motor Co. executive Graham Hoare stepping in as acting chief executive officer.
–With assistance from Upmanyu Trivedi and Jeremy Hodges.
(Updates with Brexit, EU rules in ninth paragraph)
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.
