The collapse of Britishvolt on 17 January saw the immediate redundancy of almost 300 staff at a site that had been forecast to employ thousands.
Britishvolt appointed accountancy firm EY was appointed to lead the administration. Staff were told the “majority” of its employees would be immediately made redundant.
The company’s efforts to build a large battery plant for electric vehicles near Blyth in Northumberland had stalled in recent months as it sought a cash injection to pursue the project. In November 2022 its staff were asked to accept a pay cut.
Britishvolt had said on Monday that it was in discussions over a “majority sale” of the business but those discussions appear to have failed.
Shareholders had been voting on potential new investors in the £3.8bn “gigafactory” project, which was seen as a key pillar in supplying the next generation of electric vehicles built in the UK.
In the House of Commons on 18 January, the minister for energy and climate, Graham Stuart, who is leading on the scheme said “Britishvolt entering into administration is a regrettable situation, and our thoughts are with the company’s employees and their families at this time.”
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Shadow energy minister Jonathan Reynolds pointed out that when the Britishvolt site was first announced in 2019, with the promise to deliver the UK’s second ever gigafactory and create 8,000 jobs, it was lauded by the government as its flagship example of levelling up.
He recalled that then business secretary Kwasi Kwarteng had said Britishvolt was “exactly what levelling up looks like” so now, said Reynolds, ministers had to “accept accountability for its failure, because, much like their levelling up strategy, all we have been left with is an empty space instead of what was promised.”
Ian Lavery, the MP for Wansbeck, in which the “gigafactory” was to be, asked Stuart to give guarantees that the “jobs promised with Britishvolt – 3,000 plus a further 5,000 in the supply chain—will not be forgotten” and that support would be given to any potential investor to continue a gigafactory project there.
Stuart responded that he would continue to work with investors and “encourage them to go in that direction”.
Dan Hurd, joint administrator and partner at EY-Parthenon, said: “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.
The future of car manufacturing in the UK is dependent on our ability to make electric vehicles, and to be able to export them into the EU” – Darren Jones MP
“It is disappointing that the company has been unable to fulfil its ambitions and secure the equity funding needed to continue.”
After 2030 all new petrol and diesel vehicles will banned from sale in the UK. Hybrid vehicles will be banned from 2035. With the demise of Britishvolt, UK vehicle manufacturers have been left still awaiting a UK source of batteries. Chinese-owned Envision AESC, which is working on a “gigafactory” in Sunderland will primarily support the nearby Nissan plant. Indian firm Tata and Slovakian firm InoBat still deciding on where to invest in battery production within Europe, where there are already more than 20 gigafactory projects under way. The EU has stimulated battery plant investment by streamlining state aid rules and introducing subsidies.
The US is set to have up to 15 gigafactories operational within the next five years.
In response to the demise of Britishvolt the UK parliament’s Business, Energy and Industrial Strategy Committee has launched a new inquiry into the supply of batteries for electric vehicle manufacture in the UK. Committee chair Darren Jones MP said Britishvolt’s failure was just one of a series of setbacks, including BMW’s announcement in October that it would end production of the electric Mini in Oxford.
Jones said: “The future of car manufacturing in the UK is dependent on our ability to make electric vehicles, and to be able to export them into the EU.
“That means we need local supplies of electric vehicle batteries – something we’re falling significantly behind on compared to other parts of the world.
“This inquiry will look at what’s holding back the development of electric car batteries in the UK and what needs to be done to protect the thousands of jobs across the country in this important sector.”
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