Britain’s battery industry ‘doomed by government’

Britain has now missed its window of opportunity to build a battery industry, and the government, including Rishi Sunak, is largely to blame, the head of collapsed cell manufacturer Britishvolt has told Sky News.

The company was feted as the jewel in Britain’s manufacturing crown – the first home-grown gigafactory, co-financed by the government and turning out electric car batteries from its plant in the North East – but went into administration earlier this year.

Now, in his first interview since its implosion, co-founder Orral Nadjari blamed government bureaucracy for its failure.

“We lost that window of opportunity,” said Mr Nadjari. “We already are behind East Asia. We’re already behind continental Europe. The UK, unfortunately, has lost out or is losing out on the gigafactory economy, which is massive in terms of job creation.

“Unfortunately we didn’t see that same support from the Conservative government in order to level up the North East. Because the North East wasn’t as important for them as maybe other places in this country.”

It comes as Vauxhall’s parent company Stellantis called on the government to renegotiate its Brexit deal with the EU, telling a parliamentary committee’s inquiry on electric vehicle production it was no longer able to meet trade rules on where parts are sourced.

‘Fatal delay’

Britishvolt had planned to build a large scale battery factory – a so-called gigafactory – at a site on the North East coast near Blyth.

The plans were hailed by the then Prime Minister Boris Johnson as “part of our Green Industrial Revolution” and the site was visited by then Business Secretary Kwasi Kwarteng.

But while the government agreed in principle to provide funds to help the company build the factory, Mr Nadari told Sky News the Treasury repeatedly dragged its heels.

He said even after all the necessary paperwork had been done, the relevant papers sat on the then Chancellor Rishi Sunak’s desk for months before being formally approved.

That delay was fatal, Mr Nadjari alleged, because it meant that Britishvolt ended up trying to raise most of its money at a period of war and sky-high inflation, when global investment was cratering.

“Nobody could foresee a two digit inflation, that the country hasn’t seen since 1955,” he said, adding that Britishvolt was “caught between a rock and a hard place” as Mr Sunak and Boris Johnson battled during the former prime minister’s last days in office.

“Nobody could foresee three different prime ministers, four different chancellors… The UK saw a very turbulent time… and for a startup, what is important is that continuous capital injection and that really halted off and unfortunately because of that rivalry, we were hit with a delay.”

Claims ‘completely untrue’

The government disputes the timeline provided by Mr Nadjari, arguing that the final decision was awaiting approval for barely more than two months – as opposed to more than four – though it conceded it did insist on extensive due diligence before agreeing to provide public money.

A spokesperson said: “These claims are completely untrue. Taxpayer money must always be used responsibly which is why full due diligence was undertaken before a final grant offer was made.

“The grant offer, which was welcomed and accepted by the company, included an agreement that funds could only be drawn when agreed milestones are met, such as those on securing private investment. Unfortunately, these conditions were not met, and despite significant engagement from government, a solution was not found.

“The government remains committed to Levelling Up across the UK and is actively engaging with companies to secure investments that will ensure the UK remains a world leader in automotive manufacturing”.

‘No misappropriation of funds’

Following the collapse of the company, allegations surfaced about whether its bosses, including Mr Nadjari, had been running the company responsibly.

In particular, there were stories about use of private jets, about a mansion near the company’s Blyth site which it rented for the use of executives and about large sums spent on computers and yoga lessons.

Mr Nadjari said: “Having a wellness instructor as a preventative measure for people’s health is economical. To be able to do that virtually for 300 people at a low cost of roughly £2,000 to £3,000 a month – that is very economical.

“There was no misappropriation of funds because not a single penny was spent on a private jet. £100,000 went to, as you say, a ‘mansion’… but it was a large house. And if you look at the cost of renting a hotel room for that many people during that period of time, it was far more economical to rent a house.

“The fact that it happened to have a pool, that wasn’t working for 18 months by the way, has nothing to do with it.”