How BritishVolt’s Bankruptcy Will Hurt Europe’s Auto Industry

With a ban on the sale of internal combustion engine (ICE) vehicles in the U.K. scheduled to begin in 2035, there is very little time to transition the country’s auto industry to electrification. The effort received a crippling blow last week when battery start-up BritishVolt collapsed into administration (equivalent to bankruptcy) after it could not find the necessary funding to continue constructing its battery gigafactory in the Northeast of England.

 

Artist rendering of the BritishVolt factory. Image used courtesy of BritishVolt

 

BritishVolt was founded in December 2019 and found funding from mining giant Glencore and others, with promises from the UK government for a £100 million grant if the company met certain milestones. The company failed to reach both its plant construction and battery technology goals. With only specialist auto manufacturers Aston Martin and Lotus as potential clients, the operation fell apart when the company could not find additional funding in early 2023. 

 

BritishVolt’s Plan

Britishvolt had intended to make cylindrical-cell batteries for electric vehicles (EVs) with a total plant capacity of more than 38 gigawatt-hours (GWh) of annual production by 2025. The plant it was building was expected to cost $4.7 billion and eventually employ 3,000 workers. The company had also stressed that its production would be environmentally friendly and would result in minimal waste and greenhouse gas emissions.

 

Image used courtesy of BritishVolt

 

And Then There Was One

The collapse of BritishVolt leaves just one battery manufacturer with plans to build lithium-ion batteries in the U.K. China-based Envision AESC already operates a 1.9 GWh battery plant in Sunderland, making batteries for Nissan Leaf vehicles that are built in England. Envision began constructing a new gigafactory at Sunderland at the end of 2022 with a capacity of 12 GWh when it opens at the end of 2025. The company plans to expand to produce 25 GWh by 2030, up to 35 GWh in 2035 in the U.K.

Before the failure of BritishVolt, the U.K. would have accounted for just 0.6 percent of global battery production in 2031—without BritishVolt, that number will be closer to 0.3 percent.

 

Is There a Chance for More EV Battery Capacity?

The U.K. could still build more EV battery capacity. The BritishVolt site in Blyth, Northumberland, could be attractive to other battery manufacturers. It has good access to rail infrastructure and a nearby deep-water port and is well-placed for renewable energy resources.  

The BritishVolt site could be interesting for several companies looking at possible venues in the U.K. to build battery gigafactories. Tata Group of India, owners of both Jaguar and Land Rover, are looking at European locations to build its gigafactory. With the Northumberland site becoming available, the company might see value in building batteries nearby where it builds its future EVs. Government incentives could also entice other EV and battery makers if the British government hasn’t soured on the idea of supporting battery production within the U.K.

 

What the BritishVolt Failure Means

There is a harsh reality that the failure of BritishVolt means for the British auto industry. The advent of Brexit made it difficult for the few remaining British auto factories to sell their vehicles in the European Union (EU) and receive parts from overseas. The failure of BritishVolt could have ripples throughout Europe’s auto industry as it helps solidify China as the world’s biggest player in the EV battery market.

Generally, it is considered an advantage to build the batteries for an EV at a plant nearby where the vehicles are manufactured. With only one company (Envision) making lithium-ion batteries for just one carmaker (Nissan), it is hard to see how any British automaker will be able to compete as electric vehicles become mainstream by 2030 and beyond.