The collapse of the British electric car champion

9 months ago

I mean british volt to be the UK’s answer to Tesla. By 2024, the company was to produce hundreds of thousands of lithium-ion batteries a year for the British automotive sector and help rejuvenate the economically disadvantaged north-east of the country.

Since its launch in 2019, the company has raised nearly $2.5 billion in funding pledges, including £100 million ($123 million) from the UK government and upfront battery deals for Aston Martin and Lotus.

But just nine months after laying the foundation stone for its Northumberland “gigafactory” in August 2022, Britishvolt has entered administrative liability, the equivalent of Chapter 11 bankruptcy in the US. Most of the 232 employees quit.

It’s a chaotic end for a start-up with huge ambitions that was considered the cornerstone of the British electric car industry. Its collapse has left staff, analysts and politicians scrambling to understand how it could have gone wrong so quickly, and what it means for the future of the UK battery business.

“In a way, I’m surprised,” one former employee, who left the company in December, told WIRED on condition of anonymity. “The business had ambitious plans and the people I worked with had the knowledge and experience to make them happen.”

Britishvolt was founded by Swedish entrepreneurs Orral Najari and Lars Karlstrom in 2019. None of them had EV experience, but they approached it more like startup founders than industrialists, making start-ups and bold promises of future growth.

“It was always difficult,” says David Bailey, professor of business economics at Birmingham Business School in the UK. “They had no experience in technology development. They did not receive all the funding needed to build the plant by around £3.8 billion. And they didn’t have big clients.”

But the company’s vision supported the UK government’s idea of ​​”flattening” – supporting the development of the country’s struggling, often post-industrial areas.

The Britishvolt plant in the northeast has promised to create 3,000 new jobs and 5,000 more in its supply chain. Announcement that the government would provide funding to the company in 2022, then-Prime Minister Boris Johnson called the facility “a strong testament to the skilled workers of the North East and the UK’s place at the helm of the global green industrial revolution”.

This government support was enough for automakers such as Lotus and Aston Martin to sign MoUs with Britishvolt in January and March 2022 for the production of batteries to be used in their electric vehicles. It also attracted investment from industry: Large companies invested in Britishvolt over successive funding rounds, investing approximately £200 millionand promised more if the company achieved certain goals.

Najdari and Karlstrom resigned in August 2022 after it was revealed that Karlstrom tax fraud conviction in Sweden. They were replaced by former Ford chief executive Graham Hoare, who became president of global operations.

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