The start-up, Britishvolt, is on the brink of collapse just months after Boris Johnson hailed its plans for a huge factory to make car batteries for electric vehicles in the North East as a significant “levelling up” and post-Brexit opportunity.
The troubled company has been developing a £3.8 billion gigafactory in Blyth, Northumberland, which it said would employ up to 3,000 workers directly and a further 5,000 in the supply chain for several years.
However, the group has been in emergency fundraising talks in recent weeks.
The Government backed the gigafactory project in January, promising to support Britishvolt with undisclosed funding, understood to be around £100 million.
At the time, then prime minister Johnson said Britishvolt’s plan was 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.”
He added: “Backed by government and private sector investment, this new battery factory will boost the production of electric vehicles in the UK, whilst levelling up opportunity and bringing thousands of new highly skilled jobs to communities in our industrial heartlands.”
However, the company has not yet received the promised Government funding. The BBC has reported that the money have been pulled because officials discovered it would be used to keep the company afloat rather than build the factory.
A spokesman for Britishvolt said: “We are aware of market speculation. We are actively working on several potential scenarios that offer the required stability. We have no further comment at this time.”
Britishvolt had recruited around 300 staff to develop its electric vehicle battery technology whose jobs are now at risk.
Once at full capacity, the factory in the village of Cambois, just north of Blyth in southeast Northumberland, was set to be the fourth largest in the UK.
‘If you don’t have a battery industry, you don’t have a car industry’
With the sale of petrol and diesel car and vans set to end in the UK in 2030, a rapid growth in the production of electric vehicles and their components is expected.
Gigafactories producing lithium batteries are being built in countries across Europe, but usually with an agreement to supply a car manufacturer already in place.
While Britishvolt has entered a memorandum of understanding with the British manufacturers, Aston Martin and Lotus, it has yet to receive any firm orders.
The company has faced uncertainty in recent months, with its co-founder, Orral Nadjari, leaving in July.
In recent months, the company has held urgent talks to access more funding to pump into its development until it can start production and deliver its own revenues.
An industry expert with knowledge of Britishvolt told i they believed the company had “overstretched” itself financially.
“They should have been just concentrating on getting batteries out the door,” the…