The start-up carried out a battery mega-factory project for electric vehicles.
Harsh blow to the electrification of the automotive sector in the United Kingdom: Britishvolt, a start-up that develops the project of a megafactory of batteries for electric vehicles, filed for bankruptcy on Tuesday, after months of struggle for survival. “The company is filing for bankruptcy due to insufficient investment to finance the research it was carrying out and the development of its units in the Midlands (central United Kingdom) or in the Northeast”, explains the firm EY, which will administer this bankruptcy, in a statement the press.
EY’s two appointed directors are evaluating options to monetize the company’s assets, “including intellectual property and research and development assets,” for the benefit of creditors, the statement continued. The administrators will therefore organize the closure of the company and its dismantling, it is specified. Most of Britishvolt’s approximately 300 employees “have been made redundant with immediate effect”, the statement said.
The start-up narrowly escaped bankruptcy in November thanks to short-term funding and has since been looking for long-term investors. It had indicated last week that it was in talks to sell a majority of the company. The company’s board decided on Monday that there was no viable offer to keep the company afloat, the BBC reported Tuesday morning on its website. According to the British press, two offers of 30 million pounds (well below the amounts already invested in the project) were on the table, one from the DeaLab Group, an investment fund linked to interests in Indonesia, and another from some Britishvolt shareholders.
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a chaotic trajectory
The company had acknowledged in August difficulties related to “market conditions, including uncontrolled inflation and rising interest rates”. The company had also invoked “geopolitical uncertainties” and the “global energy crisis”, postponing the production start date from 2023 to 2025. Faced with the difficulties, its employees accepted a temporary salary reduction in November. Out of a total project cost of £3.8bn, Britishvolt has raised just £200m so far.
However, in January 2022, the company had entered into a partnership with logistics construction specialist Tritax and British asset management giant Abrn concerning the construction of the factory for £1.7 billion. The project also received backing from the Conservative government of former Prime Minister Boris Johnson. But public funding of £100m, conditional on the project progressing, has yet to be paid, according to local press. The start-up aimed for an annual production of more than 300,000 electric vehicle batteries and the direct hiring of 3,000 people.
Dan Hurd, co-head of EY, said it was “disappointing that the company was unable to deliver on its ambitions and raise the necessary funds”. “Britishvolt had a rough ride and narrowly missed the road exit early as the global race for battery dominance accelerated,” said Susannah Streeter, analyst at Hargreaves Lansdown. She believes the failure of Britishvolt is a “significant hurdle to the future of electric battery manufacturing in the UK at a time when demand for electric vehicles has soared”.
Especially because the “megafactories close to manufacturing centers (automotive) are considered important at a time when the production chains are no longer so well oiled”. “We can expect a major manufacturer to play the white knight, but at the moment it looks like they’re undecided,” concludes Susannah Streeter. Bankruptcies have risen sharply in England and Wales, according to government statistics released on Tuesday: +32% in December on a year and +76% compared to December 2019, before the pandemic.
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