Feted battery firm Britishvolt is on life support after running its cash pile dry, in a sign the UK is falling behind international competitors in the race to become a leading light in the electric vehicle revolution.
The company, which has been developing a massive £3.8bn gigafactory in north-east England, has been locked in emergency fundraising talks for several weeks – pushing to raise £200m, or sell the company outright.
The BBC reported late last night it has secured an eleventh-hour reprieve, with unnamed backers set to give support to the struggling company with a short-to-medium term funding deal.
This comes amid growing fears the British firm, backed by London-listed mining giant Glencore, could enter administration as soon as this week.
A spokesperson for Britishvolt said “we are actively working on several potential scenarios that offer the required stability. We have no further comment at this time,” in response to reports of the firm’s struggles, first published in the Financial Times.
Its troubles comes just months after it secured £100m in funding from the government for the Gigafactory.
However, Britishvolt has so far not been able to access the money – with the resources dependent on construction targets it has not yet reached.
City A.M. understands it requested £30m in advanced funding from the government, which was rejected by Downing Street.
Despite ex-PM Boris Johnson’s promise of making the UK a “science superpower” by 2030, following David Cameron’s “jewel in the crown” strategy, demand for and investment in British tech has been lagging.
The government announced a record £211m boost to homegrown battery research just days ago, but the UK’s share of global research and development (R&D) investment remains down by a fifth since 2014, according to the Institute for Public Policy Research (IPPR) last week.
Chris Thomas, head of the IPPR Commission on Health and Prosperity said: “For all the rhetoric of a ‘science superpower’, the UK’s share of R&D spending has fallen by a fifth since 2014.
“The government needs to do far more to support innovation that can help achieve critical policy aims – from net zero, to better health, to greater national prosperity.”
Battery specialists battle challenging conditions
Battery cell manufacturers have endured torrid conditions this year – with supply chain difficulties and inflation eating into industry margins despite increased demand for electric vehicles.
Earlier this year in May, Johnson Matthey offloaded its battery division to Australian specialist EV Metals Group (EVM) for £50m amid concerns over returns in an increasingly saturated market.
Michael Naylor, managing director and chief executive of rival EVM told City A.M.: “Battery cell manufacturers need secure, long term and transparent supplies of high purity chemicals and battery materials.
“They also need customers, namely electric vehicle manufacturers, with whom they have long term offtake agreements. Without both, battery cell manufacturers don’t have a business.”
Alexandra Gerken, energy transition analyst at Rystad Energy, argued Britishvolt faced a “chicken and an egg” situation where it needed funds to progress, but had to prove progress for funds.
She said its financial difficulties were “definitely” a blow to the UK battery industry, which was looking to build up “crucial” supply chains to boost its plans to transition to a greener future.
“It could be difficult for Britain to move forward,” she warned.
When approached for comment, a Government spokesperson said: “We are determined to ensure the UK remains one of the best locations in the world for automotive manufacturing as we transition to electric vehicles, while ensuring taxpayer money is used responsibly and provides best-value.”