By Nicholas Earl
The hastily arranged deal for Britishvolt saves the firm and spares the government’s blushes, after it refused to provide an advance on £100m of public funding promised for the firm’s new gigafactory.
The sum Recharge paid remains undisclosed but is expected to be in the low millions rather than the £774m valuation it enjoyed at a funding round barely a year ago – a marker of the sharp decline in the company’s fortunes.
But the deal also takes the government back to the drawing board when it comes to realising its electric vehicle dreams.
Britishvolt’s planned gigafactory was meant to be the centrepiece of the UK’s electric vehicle ambitions.
The proposed factory in Blyth, Northumberland, was set to produce hundreds of thousands of lithium-ion batteries for electric cars, boosting the country’s manufacturing sector and reducing the UK’s reliance on overseas suppliers such as China.
However, following the deal, the factory will instead be a secondary factory for the Australian firm, which is owned and run by New York-based fund Scaled Facilitation.
While the Britishvolt name will remain, it will focus on batteries for energy storage and high-end sports cars.
Such a shift in focus and priority pivots the company – and the government – away from their original goals.
This means the government needs to assess whether more public funds should be channelled into powering the UK’s electric car industry.
The UK’s standing in the EV transition has only been worsened by Britishvolt’s sojourn into near-oblivion, with the UK home to just one Chinese-owned EV battery plant next to the Nissan factory in Sunderland.
Meanwhile 35 EV battery plants are planned or under construction within the European Union, and China continues to dominate the sector – which is home to six of the top 10 battery companies, and produces 77 per cent of the world’s EV battery supply.
Half-measures are no longer acceptable for the government, which will have to decide whether or not EVs are a core part of the UK reaching its net zero goals or play a role in its new economic future.
This will dictate whether to go again, and fund other early stage EV projects, or pull out altogether and rely on allies, and even less friendly trading partners, to build a greener future for the country.
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