MPs have launched an inquiry after electric battery maker Britishvolt – hailed as a pioneering firm by Boris Johnson – collapsed into administration on Tuesday with the loss of 300 jobs.
The Business, Energy and Industrial Strategy Committee said it will investigate the supply of batteries for electric vehicle manufacturing in the UK and the viability of British production.
The company – which had planned to build a £3.8bn gigafactory in Northumberland creating 3,000 jobs – hired administrators at EY after failing to raise enough cash for its research and the development of its site at Cambois, near Blyth.
Administrators said they are considering options which could include the sale of certain assets and intellectual property.
Recent turbulence in the UK electric vehicle sector also saw BMW halt production of the electric Mini at its Oxford site in October.
Darren Jones, chair of the committee, said: “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 falling significantly behind on compared to other parts of the world.
“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.”
Last Janaury, then-prime minister Mr Johnson hailed Britishvolt as an “EV battery pioneer” and said it was planning to create “thousands of jobs”.
The firm received tens of millions of pounds of financial backing from metals giant Glencore.
But it fell into emergency funding talks in November after revealing it was close to entering administration, and managed to secure funding to keep it afloat in the short term.
The company had previously been promised some funding from the government, but it was conditional on it reaching certain targets, so no money had been paid out.
Ian Levy, Tory MP for the red wall seat of Blyth Valley, said he will continue to ask the government to support the Northumberland Britishvolt site.
He said: “Our area needs this investment and the jobs that will bring, and I will be asking the government to stand by the offer of financial support from the Automotive Transformation Fund for any consortium able to put together a full package.”
The Unite union said the government was guilty of “a total abdication of leadership” over the EV battery manufacture sector.
National officer for the automotive sector, Steve Bush, said: “This is a grim day for the northeast. The complete lack of a competent industrial strategy by the government to protect jobs in the UK automotive sector is becoming potentially more catastrophic by the day.”
Tim Speed, partner and restructuring expert at law firm, Shakespeare Martineau, said: “As the government looks to phase out diesel and petrol vehicles by 2030 the British EV industry has a real opportunity to establish itself, but this needs to happen now to avoid the UK finding itself behind other countries.
“With the high start-up and operating costs involved, Britishvolt’s administration illustrates how critical government support will be for any business looking to launch in this field and importantly, be sustainable.”
