The final collapse of Britishvolt, the ill-fated battery gigafactory startup, is a lesson in the risks of relying on political support for major projects.
The startup had no technology and no customers, and so
looked to government support and financial ‘engineering’ to leverage its way to
produce battery cells for the emerging market of electric vehicle manufacturing.
Executives at the startup have blamed the press for the
collapse, but it is exactly the lack of engagement with industry and the trade press,
and a focus on influencing UK politicians in Westminster, that highlighted the
precarious strategy.
The original project was set up in Wales with the support of
the Welsh government, which has a history of understanding the importance of an
industrial strategy. However it shifted its site to Blyth in Northumberland, a political
move to attract funding.
- UK battery gigafactory planned in Wales
- Britishvolt moves battery gigafactory plan to Northumberland
- BritishVolt in sale and leaseback deal to fund battery gigafactory
Technology
Behind the scenes the company was developing its own lithium
ion battery technology. Backed by the Advanced Propulsion Centre and its
Automotive Transformation Fund saw the development of the first prototype cells
to show to potential customers.
“Britishvolt have been operating in a challenging
landscape,” said Julian Hetherington, Automotive Transformation Director. “They
have produced very credible ‘A’ Samples in volume and got them out
to customers. They did that without grant funding, and have
also leveraged the excellent UK university capability, and that vital piece of
the UK’s ecosystem, UKBIC (UK Battery Industrialisation Centre). The UK
environment can support these successes going forward. The technology developed
is exciting, and we expect this to be of interest to the sector,” he said.
This is similar to the approach taken by NorthVolt, the
Swedish startup which has been developing its own technology, integrating recycled
materials into its cells.
NorthVolt however was set up by a former executive of
electric car maker Tesla and was careful to bring major car makers onboard as
investors. Swedish car maker Volvo was a natural partner, but BMW and VW were also
wooed to be part of the project. And financing from the European Investment
Bank, with support form the European Commission, was key.
Customers
The potential base of customers was more of a challenge. Several
reports have highlighted the need for a number of battery gigafactories in the
UK to support the production of electric vehicles, especially with plans to
stop sale of vehicles with internal combustion engines as early as 2030. However
most of these will be produced by companies that already have a supply chain for
their batteries.
BMW, which is moving production of its electric Mini from
Oxford to continental Europe, has a number of battery suppliers, and is an
investor in NorthVolt.
Vauxhall, as part of the PSA Group with Citroen and Peugeot,
will be using Verkor. Stellantis will be using ACC. Toyota in Derby is the other
major car maker, and has been building its own gigafactories in Japan and the US.
Jaguar Land Rover (JLR) was the main UK-based car maker, but
it already has discussions with NorthVolt, Svolt and Envision and a relatively
small volume of around 10,000 electric vehicles in 2021 and 2022. Just before
the collapse of Britishvolt was announced, Tata, the Indian owner of JLR,
announced it would make the batteries in Europe.
- Britishvolt gigafactory CEO steps down
- Britishvolt buys German battery maker
- Britishvolt heads for crunch meeting
UK battery production
The collapse has led those same commentators to say that this
leaves just one major battery factory in the UK, the plant being built by AESC
Envision to support Nissan in Sunderland. This ignores the developments at AMTE
Power, which is converting a smaller plant in Dundee. This has established technology
for electric vehicles and existing customers in the storage market.
There is also Williams, newly owned by Australian mining giant
Fortescue, which is set to open a battery factory in Oxfordshire in the next
few weeks.
Other startups such as InoBat could also set up in the UK,
but the lack of a coherent strategy and support is likely to kill that.
- Williams joint venture will be UK's largest electric car battery factory
- Williams Advanced Engineering sold in £164m deal
- Inobat looks to third battery Gigafactory in UK, Europe
Europe
Meanwhile the large global battery makers are setting up in Hungary. Samsung led the way, converting a plasma TV factory to batteries back in 2016. Now there is a thriving ecosystem of manufacturing.
- CATL to build second European battery gigafactory in Hungary
- Hungary leads plans for world's largest battery spin out
- Samsung to build 'gigafactory' in Hungary
Lessons
The final valuation of company in the last few weeks was
just £32m, the exact value the company paid for its German equipment manufacturing
subsidiary. Even that wasn’t enough to attract investors for a rescue deal, again
showing that value creation hadn’t really happened.
Lessons have already been learned, Italvolt, set up by a
former co-founder of Britishvolt, made sure it secured technology and customers
through a deal with StoreDot. The deal could well lead to the supply of cells
to StoreDot customer Volvo.
- CEO Interview: Lars Carlstrom of Italvolt on battery gigafactories
- Italvolt secures silicon battery technology, customers
- BMW to build solid state battery line in Germany
- ProLogium raises $326m for solid state batteries
- Nissan shows solid state battery line
