Britishvolt, the UK battery startup, has gone into administration after last-minute talks with investors collapsed. Is this just another nascent business that couldn’t live up to the hype, or does it say something broader (and really quite unnerving) about the future of the UK economy?
The firm had problems, certainly. For months it had been living hand-to-mouth as it searched for long-term funding and last week, its value plunged 96 per cent. But Britishvolt was more than just another tech startup.
For one thing, it was valued at $1bn in a funding round last February. It aspired to build a new £3.8bn battery factory in the Port of Blyth in the north-east of England. This made it not only central to the UK’s domestic electric vehicle (EV) industry, but also the government’s levelling up agenda.
Indeed a year ago, then-prime minister Boris Johnson hailed the construction of the plant, which was set to create 3,000 new jobs, as “a strong testament to the skilled workers of the North East and the UK’s place at the helm of the global green industrial revolution.” The company’s collapse now says something quite different, not least about UK investor confidence.
As our tech reporter Simon Hunt notes, the Blyth factory was set to produce enough batteries for more than 300,000 electric vehicles each year, with Britishvolt signing a series of agreements to produce batteries for carmakers including a deal to supply Aston Martin with high-performance battery technology.
The nearly 300 staff losing their jobs today is bad, but there are fears for the wider domestic automotive sector, which employs roughly 180,000 people and has already suffered as a result of Britain’s exit from the European Union. Notably, in order to meet domestic content (rules of origin) requirements to trade with the EU, a significant proportion of an EV’s value must be built in the UK to avoid tariffs, and batteries make up a large percentage of that.
More than that, Britishvolt was about the UK planting its flag in the ground and saying we can be a major producer of EV batteries and that this country’s automotive sector will survive the death of the internal combustion engine. That is all in doubt now. Without a domestic supply chain, it will grow harder still to convince global manufacturers with plants in Britain, such as BMW or Nissan, to build their next EV model here.
And we needed more than the Blyth factory. Estimates suggest the UK requires four to six large battery plants, or gigafactories, to sustain a flourishing industry. We currently have one small plant. A lot of hopes, political and economic, were pinned on Britishvolt. These have now been dashed. Another industry of the future (see microchips) that may pass Britain by.
In the comment pages, Home Affairs Editor Martin Bentham wonders whether the Met can ever recover from David Carrick. While Nick Curtis, aged [redacted], says the last thing on earth that he wants is to prolong his life beyond its limit.
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