British battery startup Britishvolt has been taken over after it failed to raise emergency funding from a group of investors, raising doubts about the future of battery production in the UK.
Britishvolt said on Tuesday that most of the company’s 300 employees were laid off “immediately” because the company did not have sufficient resources to continue working.
The company planned to build a sprawling $3.8 billion plant. The plant is said to have created about 3,000 skilled jobs.
The plant was expected to be key to the future of domestic car production in the UK and a key part of the government’s intentions to ban the sale of new petrol and diesel vehicles in the country from 2030.
Experts warn that the UK needs several domestic EV battery factories to achieve this goal. Boris Johnson’s government planned to build at least seven or eight of them in the UK as part of the Green Industrial Revolution.
Household battery factories are also required to comply with the “rules of origin” of the UK’s Brexit deal with the EU, which requires 70 percent of electric vehicle batteries to be made in the UK or the EU in order for a vehicle to be duty-traded. free in the block.
Founded in 2019, Britishvolt has attracted investment from companies including FTSE 100 mining companies, Glencore and Ashtead. It also secured a £100m government pledge through the Car Transformation Fund, an £850m taxpayer-backed scheme aimed at electrifying the UK car industry.
Plans to build a factory in Blyth were supported by government ministers who saw potential for jobs and industry in the so-called Red Wall site, which was switched from Labor to Conservatives in the 2019 general election.
There is only one battery plant in the UK in addition to Nissan’s plant near Sunderland, which is owned by China’s Envision. In the EU, about 35 factories for the production of batteries for electric vehicles are planned or under construction.
Demand for electric vehicles in the UK is growing steadily.
Ben Nelmes, CEO of eco-car consultancy New AutoMotive, said the news was a “blow” to the UK’s plans to support electric vehicle production.
“Delays in the government mandate to deploy zero-emission vehicles have increased uncertainty about the level of EV adoption and future demand for EV batteries,” he added. “The UK urgently needs a green industrial strategy to prevent bad news about the UK car industry from becoming a flood in a few years.”
Britishvolt was looking for short-term investments, including a £30 million advance.
A belated offer by a consortium of shareholders was selected last week as a “preferential offer” and was seen as a last resort to stay afloat, but the company’s creditors refused to back the deal. The deal included an investment of £30m to take full control of the company and £128m in additional money to be invested later.
Instead, EY has been appointed administrator and will consider all options for the sale of the company and its assets. The accounting firm called the move “disappointing” and said it would help 300 affected employees.
Dan Hurd, co-CEO and partner at EY, said the company offers “an important opportunity to create jobs and support the development of technology and infrastructure needed to support the UK’s energy transition.”
Britishvolt executive vice chairman Graeme Hoare told staff that the “preferential offer”, backed by shareholders, was “rejected at the last minute”. He added that the board of directors was unable to secure the support of “critical creditors”. financial times reported.
The Ministry of Business, Energy and Industrial Strategy said the government “remains hopeful” that Britishvolt will find sufficient funding and is “disappointed to learn that this is not possible”.
“Our thoughts at this moment are with the company’s employees and their families, and we stand ready to support those affected,” the spokesperson said.
“The UK is one of the best places in the world to build cars and we want to deliver the best result for that place. To do this, we will work closely with local authorities and potential investors.”
Source: I News
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