Britain’s car industry relies on petrol or diesel vehicles – and every failure to be part of the electric revolution makes it more exposed
The battery startup Britishvolt eyed a big opportunity. With the looming UK ban on sales of internal combustion engine cars after 2035, big demand for batteries was guaranteed. The problem was actually building the batteries.
The company’s efforts have now come to nothing. It collapsed into administration on Tuesday after funding talks failed, leaving a string of disappointed backers ranging from the FTSE 100 companies Glencore and Ashtead to the property investor Tritax, owned by investment group abrdn, which had committed to fund a battery “gigafactory” in Northumberland.
Some of the investors are sanguine. Britishvolt – with no customers and no ready product – was always “something of a lottery ticket”, said one, who joined before the Guardian revealed a funding crunch that forced Britishvolt to put the project on “life support” last summer. The bigger investors have lost millions of pounds, but not enough to make a material impact on their balance sheets.
It is the UK government that must now answer some big questions about the future of the British car industry. In January 2022 Boris Johnson hailed the “EV battery pioneer” for planning to create “thousands of jobs”. Less than a year later, Johnson is out of Downing Street, Britishvolt is bankrupt, and the future of the UK car industry is under serious threat.
The British industry is painfully reliant on producing cars with petrol or diesel engines, but it still has a shot at retooling for the battery age. The one shining example is the Chinese-owned Envision AESC. It is working on a “gigafactory” in Sunderland, with 38 gigawatt hours (GWh) of annual output to supply the Japanese carmaker Nissan next door. Envision managers estimate that 100GWh would be enough to attract a full supply chain and its well-paid jobs to the UK.
Britishvolt’s failure could give Tata group, the Indian owner of Jaguar Land Rover, a stronger hand in negotiations over where it builds its battery factory. Tata Motors’ chief financial officer, P.B. Balaji, last week said the company would make batteries in Europe – a disconcertingly vague promise for UK officials desperate for more gigafactories. Others will be considering the Britishvolt site with interest: the Slovakian outfit InoBat, chaired by the ex-Aston Martin boss Andy Palmer, is deciding between sites in the UK and mainland Europe – and seeing what government support is on offer.
There is still a chance for the UK industry to be part of the electric car revolution, but every failure to build a British gigafactory leaves it more exposed.