The UK government-backed battery startup Britishvolt is considering entering administration with the potential loss of almost 300 jobs after it struggled to find investors willing to fund its effort to build a giant £3.8bn “gigafactory” in north-east England.
The company could announce an administration as soon as Monday, with the accountancy firm EY lined up to carry it out if it goes ahead, two sources with knowledge of Britishvolt’s operations, disclosing to media questioning. However, one source cautioned that Britishvolt was also still examining other options.
A Britishvolt spokesperson said: “Company policy is to not comment on market speculation.”
Britishvolt was founded less than three years ago with the ambitious aim of building an enormous factory that would be able to supply batteries to carmakers. It quickly became a flagship project for the UK automotive industry, and gained the support of the former prime minister Boris Johnson, who repeatedly cited the project as an example of Britain leading the way in a shift from fossil fuels.
The government eventually promised the company £100m in financial support, while the current prime minister, Rishi Sunak, was chancellor. However, Britishvolt has not yet received the money, which was earmarked for tooling within the factory, which has not been bought.
The company has struggled with disruption for months. Its co-founder, Orral Nadjari, left the company in July and the Guardian revealed in August that it had put building work for its factory on “life support” to conserve cash. That was followed by several months of increasingly urgent talks with potential investors to help cover Britishvolt’s rapidly growing costs until it was able to start producing batteries and receiving its first revenues.
Britishvolt has acknowledged the financial difficulties, although it blamed them on deteriorating market conditions after Russia’s invasion of Ukraine.
Graham Hoare, a former executive at Ford who took over after Nadjari’s departure, told the Financial Times the business needed to raise £200m to fund it until next summer.
Britishvolt has managed to attract tens of millions of pounds of investment from prominent companies including the miner Glencore and the equipment rental company Ashtead, both members of the FTSE 100. It also gained a promise of support from Tritax, a property investment company majority-owned by the FTSE 100 investor abrdn.
However, it has struggled to secure the next stage of investment, leaving it burning £3m in cash a month to pay the salaries of 300 people, according to the Financial Times.
EY declined to comment.
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UK-backed battery firm Britishvolt considers entering administration