Where does the Britishvolt collapse leave the UK’s dream of an electric future? | Auto industry

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Battery-powered company Britishvolt looked at a huge opportunity. With a looming British ban on internal combustion engine car sales after 2035, a huge demand for batteries is assured. The problem was actually the construction of the batteries.

The company’s efforts have now yielded nothing. It collapsed into management on Tuesday after financing talks failed, leaving a chain of frustrated supporters from FTSE 100 companies Glencore and Ashtead to property investor Tritax, owned by investment group abrdn, which has committed to financing a ‘gigafactory’ in Northumberland. .

Some investors are optimistic. One, who joined before the Guardian, said the funding crunch that forced Britishvolt to put the project on ‘life support’ last summer said Britishvolt – with no customers and no off-the-shelf product – had always been “something of a lottery ticket”. Large investors have lost millions of pounds, but not enough to make a material impact on their balance sheets.

The UK government now has to answer some big questions about the future of the British car industry. In January 2022, Boris Johnson praised the “pioneer of electric car batteries” for planning to create “thousands of jobs”. Less than a year later, Johnson is out of Downing Street, British Vault is bankrupt, and the future of the UK car industry is under serious threat.

The British industry is painfully dependent on producing cars with petrol or diesel engines, but it still has a chance to retrofit them to match battery life. The shining example is the Chinese-owned Envision AESC. It operates at a “giga plant” in Sunderland, with an annual production capacity of 38 GWh to supply neighboring Japanese carmaker Nissan. Envision directors estimate that 100GWh will be enough to attract the entire supply chain and its well-paying 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 to build its battery factory. Tata Motors’ chief financial officer, BB Balaji, said last week that the company would make batteries in Europe – a troublingly vague promise to UK officials desperate for more megafactories. Others will consider Britishvolt with interest: Slovakia’s InoBat, headed by former Aston Martin chief Andy Palmer, decides between sites in the UK and mainland Europe – and sees government support on offer.

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There is still a chance that the UK industry could be part of the electric car revolution, but every failure to build a British giant factory leaves it more exposed.

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