The start-up at the heart of Britain’s ambition to build an electric-car industry will not deliver batteries from a planned £3.8bn gigafactory for another three years as soaring energy costs hamper the project, its co-founder has said.
Since it was set up just three years ago, Britishvolt has touted its own ability to develop the batteries required to build a domestic electric-car industry and reduce the risk of relying on the Asian companies that dominate the market.
Although the company, which was co-founded by Orral Nadjari and Lars Carlstrom in 2019, has yet to publicly showcase its technology, it has won backing from mining company Glencore and FTSE 100 group Ashtead.
The UK government has also pledged a £100mn grant to help unlock financing for the group’s gigafactory in Blyth, north-east England, which Britishvolt had originally earmarked would start production by late 2023. It has since said the plant will be ready in 2024.
However, Nadjari, who left as the company’s chief executive earlier this month but remains its largest shareholder, said that a combination of factors would push production back until the middle of 2025.
“It does go hand-in-hand with the fact that we have inflation, we have recession and we have geopolitical uncertainties,” the former banker said in his first interview since Britishvolt announced his exit. “The main facility will be delayed slightly into mid 2025.”
Nadjari said his exit was his own decision despite the challenges facing the group. Graham Hoare, the former chair of Ford Britain, has taken over as acting chief executive.
The delay to its flagship project and the upheaval at the top of the company come as Nadjari said that rising energy costs had forced the group to halt some major construction works, such as steelworks, at Blyth until February.
The group has also cut the valuation it is seeking in a current fundraising by £200mn to £1.5bn, according to people familiar with the matter, although that is higher than the £800mn it previously achieved.
Analysts have warned that a failure to build battery production capacity in the UK raises the risks that the car industry ultimately shifts to mainland Europe, where Asian manufacturers are setting up production. The electric battery industry is dominated by Asian producers such as CATL, LG Chem and Panasonic.
The Blyth gigafactory is aiming to produce 30 gigawatt hours a year of batteries, a significant share of the 100 gigawatt hours of batteries that the Faraday Institute estimates that all EV cars sold in the UK by 2030 will need.
Nadjari said its immediate production plans were now focused on using its £200mn research and development centre in the West Midlands to meet its current goal of delivering batteries from the second quarter of 2024.
Britishvolt denied a report earlier this month that the Blyth plant was on “life support”. The £100mn grant from the government’s Automotive Transformation Fund will not arrive until next year, according to people familiar with the matter.
The government grant helped secure £1.7bn in backing for the construction of the gigafactory from UK asset manager Abrdn and real estate fund manager Tritax.
Although Britishvolt has signed memorandums of understanding to develop batteries for Aston Martin and Lotus, it is yet to strike final supply agreements with any carmakers.
Despite the growing pressure on Britishvolt, Nadjari insisted that it had a bright future. The company, which has also been using a government-funded research facility available to battery makers, is distributing samples of its product to five customers for testing this quarter, he said.
“We are no longer a PowerPoint idea,” he said. “The batteries are actually going into the hands of the blue-chip OEMs.”