Britishvolt deal in doubt as buyer fails to make final payment


Britishvolt aimed to secure funding for battery R&D and manufacturing businesses in the UK

Recharge Industries, which agreed to buy failed battery firm for £8.57m, is in default of contract, says administrator

The £8.57m deal to save failed UK battery firm Britishvolt is suddenly in doubt after Recharge Industries failed to make its final payment.

Having come in to save Britishvolt in February, the Australian battery firm was due to complete the takeover on 5 April, but the last instalment remains “unpaid and overdue”, administrator EY noted in its progress report.

“As a result, the buyer is in default of the business sale agreement,” it added. 

Hope that a deal can still be reached remains, as the report concluded: “The administrators are using the protections and guarantees afforded in connection with the [business sale agreement] to pursue the outstanding amounts due from the buyer.”

However, the claim that the contract has been breached has been rebutted by Recharge’s parent company, Scale Facilitation.

It told ITV: “We dispute we are in default. The timing of the final instalment to the administrator is linked to a funding facility, which when closed will also cover the cost of the land acquisition [for the factory in Blyth] and provide additional working capital for the project.

“The financier is in direct contact with the counterparties, and we anticipate closing in August, following a period of significant due diligence.”

The deal to save Britishvolt included the firm using Recharge’s preferred battery technology – licensed from American firm Charge CCCV (C4V) – rather than that which was in development under the original ownership.

Britishvolt aims to begin manufacturing cells for energy storage by the end of 2025 and later add automotive clients to its portfolio. The start-up previously held memoranda of understanding with Aston Martin and Lotus.

The remainder of Britishvolt’s staff have transferred to Recharge, EY previously confirmed.

Recharge is yet to begin manufacturing batteries in its home country. It currently only holds early-stage plans to build a gigafactory in Geelong, near Melbourne.

It aims to manufacture lithium ion cells without using materials from China or Russia amid increased geopolitical tension with the two nations, thereby reducing the risk to its supply chains.

Speaking when the deal was reached earlier this year, David Collard, founder and CEO of Recharge owner Scale Facilitation, said: “Backed by our global supply chain, strategic delivery partners and a number of significant customer agreements in place, we’re confident of making the Cambois [Blyth] gigafactory a success and growing it into an advanced green energy project. We can’t wait to get started and want to start as soon as possible. 

“The north-east of England has a real depth of history and talent in manufacturing and engineering. I recently spent time in the area to get to know the people and the site, and I was struck by the similarities to our Recharge Industries site in Geelong, Australia. I was really taken by the passion and pride that the people have for the region and their determination to get behind a project that can drive lasting change.

“We have the right plan in place to match and support the region’s energy and ambition to become a major player in the international battery market.”

Britishvolt went into administration on 17 January 2023, ending months of difficulties that often landed in view of the public.

It narrowly avoided collapse in November 2022 after securing several million pounds in funding, said to be from mining firm Glencore. Combined with a voluntary pay cut for its near-300 staff, this gave Britishvolt sufficient funding to survive until early December 2022.

The company was previously prepared to enter administration after the UK government rejected a request for £30m (of the £100m promised) in advance funding to prevent its collapse.

Britishvolt’s failure prompted parliament’s Business, Energy and Industrial Strategy Committee to launch an inquiry into whether EV battery production is viable in the UK or if the importing of power sources is sufficient.

Committee chair Darren Jones said: “This inquiry will look at what’s holding back the development of electric car batteries in the UK and what needs to be done to protect the thousands of jobs across the country in this important sector.

“The future of car manufacturing in the UK is dependent on our ability to make electric vehicles and to be able to export them into the EU. That means we need local supplies of electric vehicle batteries – something we’re failing significantly behind on compared to other parts of the world.”

According to a report by The Faraday Institution, the UK will need around 100GWh of battery supply – equivalent to five gigafactories – by 2030 to satisfy demand for EV production. This will rise to nearly 200GWh – or 10 factories – by 2040.

At the time of writing, the only UK gigafactory to have secured deals with a global cell supplier and a major manufacturer is Envision AESC’s planned expansion at the Nissan factory in Sunderland. It promises an output of 11GWh from 2024, eventually rising to 38GWh, supplying batteries for the next Nissan Leaf.

Additional reporting by Charlie Martin

Source: Autocar

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