Britishvolt also announced that the company is engaging in positive discussions with prospective funders and received approaches from several international investors in the past few days, according to reports
Britishvolt on Wednesday announced obtaining short-term funding which will enable the company to avoid entering into administration immediately. The car battery startup, which is less than three years old, will receive a bridging loan that would provide time for the firm to secure long-term finances. Britishvolt also announced that the company is engaging in positive discussions with prospective funders and received approaches from several international investors in the past few days, according to reports.
The company also stated that the employees have voluntarily agreed to a temporary salary reduction for the month of November. The firm planned on building a plant for producing batteries in electric vehicles in Blyth in Northumberland. The company stated that it was exploring both long-term and short-term investments and is continuing to search for potential investors.
The government had granted a total of £100m to Britishvolt for the project and the then prime minister Boris Johnson hailed the investment as a “leveling up opportunity “as the project would open several job opportunities. Boris Johnson undertook to promote the production and use of electric vehicles as a part of Britain’s ‘green industrial revolution’. By the end of 2020, the firm announced its plans for the construction of the battery plant with its founders Lars Carlstrom and Orral Nadjari as the demand for electronic vehicles increased. Britishvolt stated earlier that it hoped to produce 300,000 electric vehicle batteries in a year
The government refused the company to draw down a third of the funding early. This decision has left the £3.8bn project in jeopardy as it has been delayed several times. The company initially expected to employ around 3000 people along with the construction beginning in the year 2021 with the production of lithium-ion batteries by 2023. Recently the firm was forced to delay its operations which were scheduled to begin at the end of the year 2023, pushed back to the end of 2024. In August the company announced that it would be further delayed till the middle of the year 2025 stating inflationary pressures, increasing interest rates, and shooting energy costs as the reasons.
Britishvolt is a key part of building facilities that are proficient in providing electronic batteries to millions of electronic vehicles but is yet to secure funding to build up one of the biggest cell factories. The Gigafactory in Blyth was expected to create around 3000 new job opportunities, but the company struggled to secure funds. Gigafactories are facilities built to manufacture batteries for electric vehicles on an extensive scale. The company also stated that it was aware of the market speculations and added it was working towards measures that would make the company stable.
The firm earlier received investment from the mining company Glencore Plc whose shares also plummeted recently. The investment that the company currently received would not release the government funds with which the construction is expected to move forward. The promise of government funding helped the company to raise more than a billion from private investors. The sales of vehicles running on petrol and diesel will be banned in the UK from the year 2030 and several manufacturers are switching to electronic vehicle production which will also fire up the demand for battery production.