The collapse of Britishvolt, with the loss of nearly 300 jobs, is the bitter end of an inglorious effort by both the company and the UK government to establish a homegrown automotive battery maker.
Created at the end of 2019, Britishvolt hoped to mirror the success of Sweden’s Northvolt. What followed was a series of false starts and unfulfilled promises that slowly exposed the unedifying truth at the heart of the Britishvolt enterprise: it lacked production-ready battery technologies or mainstream automotive customers.
The UK isn’t short of talent in the battery space, but it’s light on intellectual property (IP) when it comes to creating automotive-battery chemistries that can be quickly scaled up to create a viable product.
Over the course of its three-year lifespan, Britishvolt downplayed the chemistry issue. In an 2020 interview, co-founder Lars Calstrom claimed that IP wasn’t a problem. “We feel we will compete with [Korean battery giant] LG Chem on quality and pricing,” he said.
That was a very tall order for a young company looking to take on global behemoths in an extremely complex industry where supply-chain agreements, IP and production processes are key to business success.
Calstrom was subsequently fired that year after he was convicted for tax fraud in Sweden.
The idea that the UK should have a battery industry was sound. We would be losing a lot of automotive revenue abroad if we switched to EV production without it. But Britishvolt was the wrong horse to back.
The UK government put the company’s plans at the heart of its “green industrial revolution". It offered help via the government-funded Advanced Propulsion Centre, tried to matchmake with car companies and last year pledged £100 million to backstop a wider £1.7 billion fundraise from private investors to build the gigafactory in Blyth, Northumberland.
But Britishvolt’s foundations weren’t strong enough to fulfil its side of the deal, despite replacing its executive bench with ex-Ford executives. In the rush to establish a gigafactory with a British flag fluttering from the roof, the government failed on its due diligence of a company that rode the Covid-era optimism for EV start-ups further than its fundamentals suggested was prudent.
We still need a second gigafactory to complement the one being built by Envision AESC next to Nissan’s plant in Sunderland.
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The problem here is that it's much more significant than a blow for the UK's battery plan. Without domestic battery production, rules of origin laws mean that any cars produced here for export will be unable to be "British" as a great proportion of the value is in the battery. This drives the demand for British domestic battery manufacture, without it, future car manufacturing in this country is at risk as EVs are key to all future production especially from 2035 onwards when ICE bans start to bite.
Exactly, this is why such a home-grown factory using APC/WMG battery developments was and is still so essential. The gov't should have backed this up more, as the sharp rise in costs for the factory was due to war-related increases in costs for heavy construction work and the subsequent production line facilities. A bridging loan or other such backing would have helped in the interim. Johnson would have done so, tax-heavy Sunak doesn't seem to care about growth and supporting UK PLC on the world stage...