The UK’s battery manufacturing industry is doomed unless the government ramps up support for the sector, according to the founder of failed battery startup Britshvolt Ltd.
(Bloomberg) — The UK’s battery manufacturing industry is doomed unless the government ramps up support for the sector, according to the founder of failed battery startup Britshvolt Ltd.
Formerly the UK’s main hope for a homegrown supplier to the electric-vehicle industry, Britishvolt went into bankruptcy this month. The company could have been saved had the government given it only a third of the £100 million ($124 million) pledged by former Prime Minister Boris Johnson, said Orral Nadjari, who stepped down as CEO in August yet remained the company’s biggest shareholder.
Support pledged by Westminster didn’t materialize and private financing dried up, forcing Britishvolt to go into administration. The lack of clear ambition combined with the willingness to let the firm go under shows a lack of commitment to the sector, according to Nadjari.
“Nobody was there to help Britishvolt,” he said. “The industrial policy in place lacks real foundations and wasn’t conducive to growth.”
Britishvolt’s downfall casts further doubt on the future of the UK’s shrinking auto industry and its bid to reduce dependency on Asian suppliers. Britishvolt had plans for an enormous £3.8 billion battery plant in northern England that it said would create around 3,000 jobs.
Read more: Britishvolt Failure Adds to UK Car Sector’s Existential Dread
Johnson hailed his government’s pledge a year ago to contribute £100 million to the project as emblematic of the “green industrial revolution” that would take shape in the former industrial heartlands that voted him into office.
“We offered significant support to Britishvolt through the Automotive Transformation Fund on the condition that key milestones – including private sector investment commitments – were met,” a spokesperson for the department of business, energy and industrial strategy said. “We remained hopeful that Britishvolt would find a suitable investor and are disappointed that this has not been possible.”
Britishvolt reached preliminary research deals with carmakers Aston Martin Lagonda Global Holdings Plc and Group Lotus, but never secured firm battery orders. In its last gasps, Britishvolt asked London for a £30 million loan against the value of its Blyth factory site to keep the business afloat, which was declined.
Accounting firm EY, Britishvolt’s administrator, is currently seeking bidders for parts of the company including the Blyth site. So far, not a single major car or battery manufacturer has publicly expressed interest.
Nadjari said reports in the British media last year that Britishvolt executives were overspending on lavish perks such as private jets were overblown.
“Just because a board member or an investor owns a private jet doesn’t mean we were all flying about in private jets,” Nadjari said. “During my time, the business hadn’t invested a single pound of company money on private jets.”
Texas billionaire William Harrison, who is chief executive officer of private equity firm Cathexis Holdings LP, was a board member of Britishvolt.
Britishvolt’s collapse is a setback for UK carmakers coming off their worst year in more than six decades. Britain won’t be able to build a sizable local battery industry — key to producing EVs at scale — unless it makes major policy changes and protects manufacturers against the region’s high energy costs, Nadjari said.
“If nothing changes, and quickly, anybody who takes that site will have the same problems,” he said.
—With assistance from Siddharth Philip.