Britishvolt

What did it do?

Britishvolt was a British start-up that aimed to manufacture lithium-ion batteries for the automotive industry. Founded in December 2019, the company began building a £2.6 billion gigafactory on a former coal site in Blyth, north-east England, that was to employ 3,000 people. In September 2022 its development cells passed safety tests and were sent to seven customers for trials.

Why did it shut down?

Building the factory required around £2 billion, and the company could not raise it. According to the Financial Times, while still years away from revenue it was paying around 300 staff £3 million a month in salaries and drawing attention for lavish spending. In August 2022 construction stopped and the largest shareholder, Orral Nadjari, stepped down as CEO. In November 2022 the government refused to bring forward £30 million of a grant tied to construction milestones. When rescue offers came to nothing, the company went into administration on 17 January 2023 and most of its employees were laid off immediately.

The story

In July 2021, on an empty site beside a former coal-fired power station in Blyth, Northumberland, a huge plan for Britain's electric-vehicle future was approved: a £2.6 billion battery gigafactory that would employ 3,000 people. Behind the plan was Britishvolt, founded in December 2019 and yet to sell a single commercial battery.

The company's founders included Swedish former investment banker Orral Nadjari and Swedish automotive entrepreneur Lars Carlstrom. Construction began in September 2021. Mining giant Glencore became an investor in August 2021 and put in a further £40 million in February 2022, a round that valued the company at more than $1 billion. In January 2022 the British government pledged £100 million to the project through its Automotive Transformation Fund. The company was planning a second factory in Canada and had struck a deal to buy a battery maker in Germany.

Yet the roughly £2 billion needed for the factory never materialised. The Financial Times reported that the company had hired around 300 people and was spending £3 million a month on salaries while still years away from revenue, with spending ranging from expensive company cars to frequent use of private jets. In August 2022 construction stopped and the largest shareholder, Nadjari, stepped down as CEO. In November the government refused to bring forward £30 million of the grant tied to construction milestones; less than £5 million in additional funding from Glencore kept the company afloat for only five weeks.

In January 2023 the last rescue talks collapsed, and Britishvolt went into administration on 17 January; most of its 300 employees lost their jobs the same day. The company was reported to have failed with £120 million of debt, a figure that later rose to £160 million. In February 2023 Australia's Recharge Industries bought the company for £8.6 million, but the financing deal could not be completed. The Blyth site was sold in April 2024 to be turned into a data centre campus, and Britishvolt went into liquidation in November 2024.

Britishvolt's story shows how quickly an industrial-scale dream can melt away without capital discipline. Political backing and big-name partners generated excitement; but scaling up spending before securing the money to finish the factory left the company defenceless at the first cold wind.

Lessons for founders

• On an industrial project that is years away from revenue, cut luxury spending to zero; when the first big crisis comes, every line of expenditure ends up in front of investors.
• If your plan depends on a public grant, be clear from the outset which milestones the payments are tied to and how you will fund those stages.
• Do not start building a giant factory without binding customer offtake agreements; samples sent for testing are not orders.

Sources

1. Britishvolt (Wikipedia)
2. Britishvolt: UK battery start-up collapses into administration (BBC News, 2023-01-17)
3. Battery startup Britishvolt enters administration as rescue talks fail (The Guardian, 2023-01-17)
4. Britishvolt ‘gigafactory’ site sold for £110m to US private equity firm (The Guardian, 2024-04-15)

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