Battery pioneer Britishvolt has criticised the Government for acting too slowly and changing the terms of a £100m grant that is seen as key to getting its £3.8bn North East gigafactory off the ground.
In an exclusive interview with BusinessLive, the start-up's executive chairman Peter Rolton and chief UK projects manager Tony Laydon sought to dispel speculation the project had run into trouble, but said the Government's handling of the promised support had "not been very helpful". Despite the Prime Minister claiming confirmation of the support had been sent in early July, when challenged by Wansbeck MP Ian Lavery in the House of Commons, Mr Rolton said it took another three weeks to secure.
He said: "It took longer than we thought to get the grant out of the Government. The grant is actually secured against manufactured equipment. What was meant to happen originally was that they were going to give us that as deposits for the equipment but they realised the equipment doesn't arrive for six months to a year because it's all manufactured in Korea or Germany so they won't give us the grant until the equipment is in the UK. The grant is actually coming in against equipment we've already paid for.
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"It's not very helpful as it's not really a grant. And they took far too long with it. They announced it and then took another six to nine months to get it over the line."
Mr Rolton said Britishvolt is now working with investors - including Arbdn and Tritax - to secure funding for the main construction phase of the factory. A contractor is yet to be appointed to deliver the groundworks and foundations for the Cambois plant which aims to turn out more than 300,000 lithium-ion batteries each year for a range of customers the firm says it has lined up in the performance electric vehicle, commercial electric vehicle and battery storage markets.
Mr Rolton said the end of the enabling contract - which has included clearing the 93 hectares near the former Blyth Power Station site and culverting of streams - had given rise to speculation about the project's future. But he insisted that work will start again, though not before the second quarter of 2023, pushing back Britishvolt's recent estimate that production would start towards the end of 2024, into mid-2025.
Having spent between £60-£65m on the initial phase of works, Britishvolt has been hit by the resignation of its chief executive and co-founder Orral Nadjari. Mr Rolton said it was "always the plan" that Mr Nadjari - a former banker with little manufacturing experience - would step down but admitted the move had come sooner than anticipated as the challenge of running a start-up of this scale had taken its toll.
Britishvolt, which is now being led by interim CEO Graham Hoare, will concentrate on "next generation" larger format cells of the type required by performance electric vehicle manufacturers. The start-up has already signed deals with Aston Martin and Lotus, and Mr Rolton said seven other "big name" manufacturers had signed deals with non-disclosure agreements attached.
Earlier this year, Britishvolt announced a €36m deal to acquire German manufacturer EAS, which already has the tooling for production of these batteries. In addition, the Northumberland factory will also produce stackable prismatic cells to be sold to energy companies that need storage for renewable power and commercial vehicle makers.
Mr Laydon, who has previously worked at a senior level in Nissan, said: "We might have moved back a little bit but we're seeing the ramp up of demand is more significant than it was. The launch might be later but the rate of climb will be significant based on what we're seeing in the market."
A Government spokesperson said: "The grant offer was discussed with Britishvolt in detail and was welcomed and accepted by the company. We look forward to seeing the project progress.
“All grant funding provided by the Government goes through a thorough approvals process to ensure taxpayer money is used responsibly.”
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