England still without batteries. Britishvolt’s collapse shows how difficult it is to get a gigafactory off the ground

The north of England, already tested by the second industrial depression, experienced three years of hope. The production of lithium cells with a capacity for half a million electric cars per year and three thousand employees was to start near Newcastle. However, despite many promises and government support, the start-up Britishvolt was unable to take the idea to mass production and ran out of money.

The number of lithium-ion cell factories in Europe is increasing. However, most of them have Chinese or Korean owners, others are co-owned by car companies or energy companies. The largest independent project is the Swedish Northvolt, but it too soon received the support of Volkswagen, BMW, banks and the European Battery Alliance.

Thanks to this, Northvolt has managed to collect over eight billion dollars from investors since 2017. In addition, the company was founded by two former Tesla employees who knew something about both batteries and production.

Britishvolt tried to use the same recipe, but was founded by two people with no comparable experience. Lars Carlstrom worked as a serial entrepreneur launching various greenfield projects, but they had little to do with engineering and chemistry. Orral Nadjari was a banker. The basis of their bet was the apparent absence of a similar project in Britain, where over a million cars are produced annually.

The whole thing developed remarkably chaotically from the beginning. The original plan was to buy the technology from elsewhere. It was only along the way that scientists from the University of Warwick got involved and offered their own procedures.

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Britishvolt had an exceptionally lucky hand in finding the land. The suburb of Blyth, near Newcastle, offers proximity to a seaport, a large area for building production premises, connections to nearby wind farms and an energy cable from Norway. And on top of that, friendly authorities who value the opportunity to get jobs.

But two other pillars of the program failed. Of the expected costs of 3.8 billion pounds, one hundred million was collected from investors. At the same time, the army of employees grew to three hundred people, and so the money quickly dwindled.

At the same time, the development results are meager. Britishvolt has only demonstrated a few prototype cells so far. All the challenges of mass production are still ahead of him and excavators have barely started on the Blyth property.

The planned start of production this year had to be moved to 2025. This is precisely how Britishvolt missed the biggest opportunities. The production of a series of electric cars is starting right now, and along with this, the supplier contracts are being concluded. Nobody can wait another two years.

The whole thing was not helped much by the involvement of the Conservative government, which wanted to get green points for the project. The ministers took the statements made by the company’s representatives about the upcoming serial production as a fait accompli and a confirmation of a successful policy. The government also promised an investment of one hundred million pounds, but made it conditional on an order for batteries from a major car manufacturer.

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According to Financial Times sources, one of the ministers personally telephoned the heads of car companies and pleaded with them to establish contact with Britishvolt. Some of them actually did, but only received vague promises. The company only has non-binding memoranda in hand with Lotus and Aston Martin, marginal manufacturers with production in the low thousands of cars a year. Therefore, the government did not provide any money.

Lars Carlstrom was forced to leave the company at the end of 2020 after it was discovered that he had concealed tax offenses from his past. Orral Nadjari succeeded him last summer at the insistence of the board, which was unnerved by his frivolous way of dealing with potential partners.

The leading positions were taken by more experienced managers from the automotive industry, and the chaotic mood of the startup slowly changed into a more solid organization. But it was too late. Britishvolt ran out of money last week and filed for creditor protection. No private investor is willing to support him.

Without strong capital, even the best idea is not enough, even at a time when the UK battery industry is fundamentally lacking. Benchmark Mineral Intelligence estimates the country will need 175 gigawatt-hours of production capacity in 2030. At the same time, only the nine-gigawatt-hour Nissan plant in Sunderland is under construction.

Nissan is currently importing the Ariya electric car to Europe from Japan, BMW is moving production of the Mini electric hatchback to China, and the Countryman battery SUV is preparing a plant in Leipzig. Jaguar Land Rover is considering starting its own production of cells, but it is significantly delayed.

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It is equally striking that none of the Chinese or Korean suppliers are pushing into Britain. All their European plants are connected to a specific car company – CATL in Germany with BMW and in Hungary with Mercedes, LG Chem in Poland with Volkswagen and Hyundai. Few people today are betting on the future of the British car industry.

Which Lars Carlstrom in particular should think about. After being fired from Britishvolt, he traveled to Turin, where he founded Italvolt according to the same recipe. Here, too, he relies on unemployment in the former industrial region. He even let himself be photographed at the abandoned headquarters of the Olivetti company, which he wants to convert into battery production. The local authorities are responding favorably, but there is still no news of an influx of industrial activities to Italy.

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