A gigafactory of one’s own

• Olaf Scholz, the German chancellor, said the country needs to build “three to four large wind turbines” per day in order to reach its target of net zero by 2045.
• US president Joe Biden approved an emergency declaration for California, after fierce storms killed 19 people.
• A shift in the El Niño weather pattern could make 2024 the first year the world exceeds an average temperature of 1.5 degrees, according to scientists.

Britain’s attempt to enter the global race to manufacture electric car batteries is stalling. A rescue deal for BritishVolt, the UK’s only homegrown EV battery startup, has failed and the majority of its 300 staff have been made redundant.

Despite the promise of government support, backing from Glencore, and a well-placed factory site on the Northumberland coast supplied with clean energy, BritishVolt failed to attract enough customers and has collapsed into administration.

So what? In seven years, sales of new combustion engine vehicles will be banned in the UK. By then, the UK electric car industry will need 100 gigawatt hours of annual battery-making capacity in order to meet its net zero target – a third was due to be supplied by BritishVolt. 

Both the EU and the US have announced major funding and strategies to build gigafactory capacity. The UK risks losing out.

Dream vs reality. When the government pledged £100 million to the startup in 2020, ministers envisioned it would bring prosperity to the North and deliver green self-sufficiency post-Brexit. But the reality is UK plc is lagging in the race to build gigafactories: just three of Europe’s 41 open or planned sites are located in the UK. The only UK factory up and running is owned by NorthVolt, a Swedish company that boasts $55 billion of orders from car manufacturers and started producing batteries last year.

Critics say that BritishVolt’s initial £800 million valuation was overblown – but that’s not the only reason for its demise. 

• Customers. Although it has secured exploratory deals with Lotus and Aston Martin, what BritishVolt lacks is the patronage of a large car-maker. “Lotus will barely make 2,000 vehicles a year going forward, maybe 3,000. Aston Martin might make 8,000. That is not enough to justify a battery factory,” says Ian Henry at AutoAnalysis. “Other than Jaguar-Land Rover I’ve always found it very difficult to see where UK demand for battery cells made by BritishVolt was going to come from.” That opportunity may have passed; last week the finance director of Tata Motors, JLR’s parent company, suggested moving battery production to Slovakia.

• Product. BritishVolt had initially planned to licence technology from existing manufacturers but later decided to develop its own in-house technology. But potential clients say prototypes have been late to arrive. “They could have easily had a collaboration with Jaguar by now, but they didn’t have any technology to share with them and this created issues,” says founder Lars Carlstrom, who left the company in 2020.

• Management. BritishVolt’s other founder, Orral Nadjari, was advised by the board to step down as CEO in August because, according to the Financial Times, “investors were put off by his style.” People familiar with the company say that at one point it had 300 workers on payroll, despite having never generated any revenue. The factory in Blyth is supposed to come online in 2025 but construction has been slow to start. BritishVolt refused to comment for this article.

But it would be unfair to argue that the firm’s problems are solely of its own making. Being located in the UK is no guarantee of winning contracts with British automakers – for example, BMW has decided to import batteries for the Mini, built in Oxford, from Germany. At the same time automakers are increasingly bringing battery production in-house. Volkswagen and Stellantis both have plans for their own factories in Europe.

The UK’s head start in technology is challenged by European governments working hard to grow the sector with subsidies. Germany has pledged €1 billion of support for production. Poland and Hungary are setting up special economic zones. 

And in the background looms China’s substantial control of the processed lithium required to make batteries in the first place. It currently controls 77 per cent of global gigafactory capacity, according to Benchmark Minerals Intelligence.

The boosterism that launched BritishVolt is drained. It failed to demonstrate it could secure orders or produce tech on time. When it ran out of funds, no one was willing to step in. So much for a British battery revolution.

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