Australian Firm Launches Bid to Rescue Collapsed UK Battery Company Britishvolt

Peter Rolton, executive chairman of electric vehicle battery start-up Britishvolt, shows a billboard at the site of the company's large planned battery plant, in the former industrial town of Blyth, England, on Jan. 27, 2022. (Nick Carey/Reuters)

An Australian start-up has launched a rescue bid for British electric car battery business Britishvolt, which was once praised by former Prime Minister Boris Johnson but fell into administration last week.

Recharge Industries said it lodged a late takeover bid on Tuesday for the firm, a week after Britishvolt collapsed and made the majority of its roughly 300 workers redundant.

Britishvolt had been promising to build a £3.8 billion gigafactory producing batteries for electric cars in Blyth, Northumberland. But the project ran into serious difficulties months ago as it started to run out of cash before it had even cleared the site in preparation for construction.

Last week, the company appointed administrators at EY-Parthenon after failing to raise enough cash for its research and the development of its Cambois site.

On Wednesday, Recharge told the Australian Financial Review that it has made a non-binding takeover offer.

Recharge, which is backed by New York investment firm Scale Facilitation, is moving forward with plans to build a similar battery factory in Geelong, near Melbourne.

David Collard, Scale Facilitation’s Geelong-born founder and chief executive, said a takeover of the British business would make strategic sense.

He said: “Strengthening our friends in the UK, especially when most others are kicking them when they’re down, is in our interest and definitely in the spirit of (Australia-UK-US security pact) Aukus.”

Bid Taken ‘Seriously’

Following the Australian start-up’s 11th-hour rescue offer, the UK government said it will look “seriously” at any bids to save Britishvolt.

Business minister Nusrat Ghani told the House of Commons on Thursday that the government is committed to the industrial site in Northumberland.

Ghani said: “This is a fantastic site. All the ingredients are in play. I cannot comment on what’s been speculated in the press, but I can confirm that any credible options going forward, that we will of course take them very seriously.

“We are very committed to the site. … This government is determined to make that site work for Blyth as it will for the whole of the United Kingdom.”

Labour MP Ian Lavery, whose constituency is home to the Cambois site, has welcomed Recharge’s rescue bid.

He told the House of Commons on Wednesday that the bid and the expressions of interest from 12 other companies are “very encouraging.”

He added: “We cannot have another false dawn, we cannot have another Britishvolt, where a project of this magnitude, the land, the planning, everything in place, for the government to go cold and step back from assisting our regions.”

Much-Trumpeted Venture

Britishvolt expected to make 300,000 battery units a year, fulfilling the demand for around one in four vehicles sold on the British market.

The plan was to develop the 95-hectare site, where a coal-burning power station once stood, and use Norwegian hydro-electric power transmitted 447 miles under the North Sea via the world’s longest interconnector.

When it was first announced in late 2020, it was hoped the investment would be comparable in the North East to that of Nissan in Sunderland in the 1980s.

In January 2022, then-Prime Minister Boris Johnson trumpeted the thousands of skilled jobs the Britishvolt gigafactory was expected to create.

Announcing the government was backing the ambitious project with cash from the Automotive Transformation Fund (ATF), Johnson said Britishvolt would employ 3,000 people directly, with another 5,000 in the pipeline.

Johnson said the plant would become part of the UK’s “global green industrial revolution.”

But Britishvolt simply could not raise enough cash to keep going. The company had been promised £100 million in government funding, but to protect taxpayers in the event that the firm failed, that money was only available if the company met certain milestones, which it never did.

In recent months the business has tried to find enough cash from private investors to stay above water, including mining giant Glencore. But its efforts fell short.

Rising interest rates and the risk of recession have made fundraising much harder for many start-ups, especially those seeking huge sums for vast projects like an EV battery plant.

Setback for Car Industry

Britishvolt’s failure marks a setback for Britain’s car sector as industry officials and experts see domestic EV battery plants as essential to keep UK car production from shifting to mainland Europe.

To comply with trade requirements with the European Union, a large part of an EV by value must be built in Britain to avoid EU tariffs.

According to new figures released by the Society of Motor Manufacturers and Traders (SMMT), UK car production fell to its lowest level since 1956 last year as output was hit by global shortages of semiconductor chips.

A total of 775,014 cars were built in 2022, down 9.8 percent from the 859,575 made during the previous year, and 40.5 percent down on pre-pandemic levels in 2019.

But SMMT said the UK produced record levels of electrified vehicles last year, with almost a third of all cars made fully electric or hybrid.

A UK government spokesperson said: “We are determined to ensure the UK remains one of the best locations in the world for automotive manufacturing.

“Our success is evidenced by the £1 billion investment in Sunderland in 2021, and we are building on this through a major investment programme to electrify our supply chain and create jobs.”

PA Media and Reuters contributed to this report.