The UK could face a max exodus of electric vehicle (EV) companies following the purchase of collapsed Britishvolt by an Australian start-up, Express.co.uk has been told. This week, Recharge Industries officially bought Britishvolt, the firm that was building a £4billion EV battery-making plant (gigafactory) in Northumberland until it collapsed into administration after running out of cash.
The gigafactory plan had been hailed as a crucial component of the UK’s burgeoning EV industry, particularly important given the looming ban on new petrol and diesel cars. While Recharge Industries’ purchase of the site appears to have kept the UK’s gigafactory hopes alive, Ben Kilbey, who was Director of Communications at Britishvolt, said that is not without risks.
That is partially because the new owners have said that before using the prime site in Blyth in the northeast for EV purposes, they will first be focusing on batteries for energy storage.
The firm hopes to make those products available by the end of 2025. It is not until after this that the Australian company then plans on making batteries for high-performance sports cars.
Mr Kilbey, now Director of Strategic Communications at Fruitlab, told Express.co.uk: ”The fact the initial product is said to be stationary storage [means] there is still a real threat of the UK automotive industry migrating to other countries with more attractive EV incentives – right now that’s looking like a flood of business heading to the US.”
But he did not blame the company for taking this plan of action as this seems like a “sensible way to help meet ambitions and take a huge amount of risk off the table as the company scales. Where would humanity be if it wasn’t for ambition and grit?”
Meanwhile, another “potentially clever part of the narrative is that the Australian owners will be licensing US technologies, further strengthening relationships in the race to zero”.
Mr Kilbey added: “All businesses need revenue/customers to survive, that’s just a simple dynamic of basic market forces. I read recently that the UK is a real contender in the stationary battery business, so producing them at scale seems to be a good choice of first product.”
However, ensuring a local source of car batteries was deemed as vital for the domestic EV industry. The delay in producing them could then throw up the risk of a continued reliance on imports.
Britishvolt’s former executive chairman previously explained: “The UK automotive industry needs a local source of batteries. Chinese or other Asian imports are not going to be an option. There will be very, very significant shortfalls of batteries. We are absolutely vital to maintain the UK industry and support those jobs.”
Questions have also been raised as to how Recharge will be able to succeed when Britishvolt – whose’ downfall was blamed on a lack of battery experience, proven technology, customers and revenue – failed. As Recharge also has a fairly similar profile to the one Britishvolt had in that little manufacturing experience.
But Mr Kilbey said: “The fact of the matter is, seemingly, industrial policy in the UK isn’t conducive to bringing the established battery brands to the country, regardless of having the best site.
“Once again we are seeing the fight coming from the less established parts of industry, who see the bigger picture. Is it a concern? Depends on how you look at it, but from where I sit an Australian/UK trade partnership is far from concerning, and instead rather exciting.
“Britishvolt had many external negative factors as headwinds, as well as its own internal challenges. For me, using/licensing existing tech to get going, and then potentially looking at other chemistries in-house [for automotive], seems a logical way to grow a business and reduce costs and de-risk.
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“The more de-risked the easier it will be accessing money on the financial markets, both equity and debt. Plus the whole Australia/UK narrative is perfect for energy security and decoupling/hedging against global supply chain volatility and the dominance of China in the EV/battery supply chains.”
Recharge Industries itself has also stressed the importance of keeping Britishvolt “in the hands of friendly nations”. It is funded by New York investment firm Scale Facilitation.
David Collard, Scale Facilitation’s founder and chief executive told the Australian Financial Review: “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.
“Keeping Britishvolt viable and in the hands of friendly nations and companies is critical to the security of British and European supply chains and advanced manufacturing capabilities.”
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