Staff at battery start-up Britishvolt in Northumberland take a pay cut, after it secures five-week funding lifeline
British electric vehicle battery start-up Britishvolt has secured enough funding for five weeks, it is being reported.
Earlier this week reports suggested that Britishvolt was near collapse and was set to enter administration on Monday, after the company’s efforts to bring in more funding reached a dead end.
But now chairman Peter Rolton told the Financial Times on Wednesday that the operation had secured a lifeline deal that will give the battery start-up enough money to last until early December.
Rolton also told the FT that staff had agreed to take a “significant” pay reduction during November in order to make the money last, while company executives are working with no pay for the month, he said.
The FT quoted Rolton as saying that the new funding, announced on Wednesday, comes from a backer who demanded anonymity as a condition for providing the money.
However the Guardian newspaper has reported the funding came from Anglo-Swiss multinational commodity trading and mining company Glencore plc.
The sum raised on Tuesday was in the single-digit millions of pounds, the FT quoted two people familiar with the discussions as saying.
Britishvolt previously said it needed to raise £200 million to keep the business running until next summer.
The startup does not expect to begin generating significant revenues until the middle of the decade. It has been reliant on investor funding to meet its wage bill, which is about reported running at £3m a month.
The lifeline funding arrangement still leaves the business needing to secure long-term funding in the coming weeks or face the renewed prospect of bankruptcy before Christmas.
Britishvolt has been developing a £3.8 billion “gigafactory” at Blyth in the north-east of England and has been backed by a number of companies including Glencore.
The Northumberland factory is expected to create 3,000 jobs and was hailed by then-prime minister Boris Johnson in January for potentially bringing “thousands of new highly-skilled jobs to communities in our industrial heartlands”.
There had been several delays in the start of production at the plant, the most recent to the middle of 2025, for which the firm blamed “difficult external economic headwinds including rampant inflation and rising interest rates”.
The war in Ukraine and the UK’s political uncertainty over the past couple of months has also not helped matters.
It should be noted that Britishvolt had also received a promise of £100m from the British government, but that funding was only to be provided once the factory’s construction work hit a certain milestone that has not been reached
Rolton however told the FT he was “confident” Britishvolt would be able to raise additional funds needed in time.
The company is reportedly holding talks with several potential backers, including two “strategic” industry players and a handful of traditional investors, he added. “We are nudging along, we are improving the position, but the interest is definitely there,” he told the FT.
Britishvolt’s current significant shareholders include Cathexis, as well as Glencore and industrial equipment group Ashtead.
And there is another UK EV battery venture looking to compete.
In July 2021 a joint venture between Coventry City Council and Coventry Airport Ltd filed a planning application for a battery Gigafactory at Coventry Airport.
Essentially, this West Midlands Gigafactory joint venture will manufacture electric car batteries.
The proposals would deliver 5.7m sq ft of space for both battery production and recycling, would add £434m in GVA to the regional economy each year, as well as create 6,000 new jobs and tens of thousands more in the supply chain, Coventry City Council has previously stated.
And the Coventry factory would be green as well, as it will be powered by 100 powered by renewable energy, using a combination of sources including solar and wind power, as well as grid supplied renewables.
The gigafactory, which is slated to be “production ready by 2025”, will also be able to recycle used batteries as well as build new ones in an industry-leading approach known as ‘cradle to cradle’.
It should be remembered that the west midlands is a key car production part of the United Kingdom, with a third of all cars produced in the UK hailing from the region. Indeed, the region is home to Jaguar Land Rover, Aston Martin Lagonda, and BMW.
Coventry Airport meanwhile is adjacent to the UK’s largest battery research centre, the UK Battery Industrialisation Centre (UKBIC).
The UK Government has made up to £500m funding available for a Gigafactory, which the West Midlands will be bidding for in due course.
In September this year, the West Midlands Gigafactory joint venture appointed battery industry technology expert Richard Moore to spearhead its strategy and global contact with leading cell manufacturers for electric vehicles (EVs).