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Britishvolt, Power On or Off?

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What will happen to Britishvolt? In September 2021, on a post-Pandemic holiday to the Northumbrian coast, we noticed an unusually large building site outside Blyth. It was the beginning of the construction of the Britishvolt gigafactory. This is the UK’s project to build hundreds of thousands of lithium ion batteries for electric cars. We were glad to see it because Blyth will benefit from levelling up, and it would be good if Blyth could transition from its former role as the sea port for Newcastle’s coal to a thriving centre for green and renewable energy.

Is it too good to be true? Blyth would certainly benefit from the promised 3,000 jobs. The UK needs to invest in clean technology that will create growth and move it towards its net zero targets. Therefore, I can see why Boris Johnson promised Britishvolt £100 million to get going. Northumbrian University bought into the concept and introduced courses in renewable energy, electronic circuits and battery tech labs to support the growing industries in the region.

The business opportunity is certainly there. After 2030, all new cars sold in the UK must be electric, and the UK needs to produce lithium batteries at home in order to avoid the post-Brexit tariffs. Britishvolt’s aim was to produce 300,000 batteries by 2027 and the market has massive potential. Motley fool says it will sky-rocket. But there is competition.

Britishvolt’s competitors

At least ten Asian EV battery competitors are already in production. Of these, the three larger ones are the Chinese-owned CATL, Panasonic and LG Energy Solutions from Korea. CATL produces a third of the world’s EV batteries and supplies Tesla, BMW and VW. Panasonic has 10% of the market and an established relationship with Tesla. LG Energy Solutions has a 14% market share and supplies GM.

There are competitors in Europe too, although these are mostly in the early stages.  Sweden has Northvolt, Norway has Freyr. In France there is Verkor, and in Germany there is Automotive Cells. Italvolt in Italy is another new supplier. Interestingly, one of the founders and CEO of Britishvolt was Lars Carlstrom who resigned due to a conviction for tax fraud in his native Sweden. He is now CEO of Italvolt which is appropriately based in Piedmont, the home town of the inventor of the battery, Alessandro Volta.

What will happen to Britishvolt?

The hope is that Britishvolt might become an important player in the UK’s future green industries but this is looking doubtful because it has run out of money. Sadly, its staff have accepted a salary reduction for the month of November while the company waits for more funds from investors or the government. Ironically, this is all happening during COP27 while world leaders are discussing the climate emergency. The gigafactory wanted  investments of £1.7 billion and seems unlikely to be up and running by 2025.

This is a bad week to be asking the UK government for money as we are waiting to hear what will be in their Autumn Statement on the 17th November. With spending cuts expected it is a sensitive time and the Government will need to show the utmost prudence in their use of taxpayers’ funds. We hope Britishvolt will be successful and wait to see if anyone else will come forward to invest.

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