Britishvolt, a prominent battery start-up that generated enthusiasm from British politicians but never commercially produced a battery, filed for insolvency on Tuesday.
The collapse deals a blow to Britain’s ambitions to develop low-carbon businesses to replace some of the trade lost under Brexit. It also threatens the future of Britain’s auto industry, which requires domestic sources of electric batteries if it is to thrive.
Founded in 2019, Britishvolt promoted itself as a British domestic champion. It had plans to build a 3.8 billion pound (or $4.7 billion) battery factory near Blyth in northeast England, creating 3,000 jobs.
Despite forming partnerships with companies like the carmaker Aston Martin and Glencore, the commodities trading house, it failed to raise enough money to either construct the factory or perfect its battery technologies. The company said Tuesday that it was forced into administration, analogous to filing for bankruptcy.
“It is disappointing that the company has been unable to fulfill its ambitions and secure the equity funding needed to continue,” Dan Hurd, a partner at EY-Parthenon, a consulting firm that is now in charge of winding up the company, said in a statement.
On Tuesday, all but 26 of the 232 employees at Britishvolt’s main unit learned that they had lost their jobs.
The insolvency raises important questions about the future of the British auto industry. The government is pushing carmakers to rapidly convert to building electric cars, with a ban on sales of new gasoline and diesel-powered cars beginning 2030. The idea is to both meet far-reaching targets on reducing emissions and to keep pace with an enormous shift to electric cars that is rippling through the global auto industry.
Experts, though, say Britain does not have sufficient sources lined up to build the batteries that make up a high proportion of the contents of electric vehicles. Ideally, these devices should be made near car assembly plants in order to meet local content rules and because they are heavy and costly to ship.
“A problem like this will set back the whole development process of the industry,” said Peter Wells, a specialist on autos at Cardiff Business School.
Nissan, which operates the largest auto manufacturing plant in Britain, has arranged for a Chinese manufacturer to make batteries near its factory in Sunderland, but other carmakers may be wary of investing more in Britain without plants like the one planned by Britishvolt, Mr. Wells said. He added that the government, which backed away from Britishvolt after endorsing it as recently as July, risked looking impatient. “This is a long game,” he said.
Last July, the government said it had made Britishvolt what it called an offer of a grant to help build the plant.
“The Blyth gigafactory will turbocharge our plans to embed a globally competitive electric vehicle supply chain in the U.K. and it is fantastic to see how the project is progressing,” Kwasi Kwarteng, who then served as business secretary under Prime Minister Boris Johnson, said at the time.
Mr. Kwarteng left government in the fall after a brief, ill-fated stint as chancellor of the Exchequer, when he proposed a policy of tax cuts and deregulation that alarmed financial markets.
In recent months, the government’s enthusiasm for Britishvolt appears to have cooled.
A spokeswoman for the government said Tuesday that the company did not meet “key conditions” including attracting sufficient private investment, and so the grant was not paid out.
“Our thoughts are with the company’s employees and their families at this time,” she said.
EY-Parthenon says it is assessing the value of Britishvolt’s intellectual property and other assets to raise funds to satisfy creditors and other obligations.
The company’s most valuable remaining scrap may be the large site near Blyth where it planned to build a plant big enough to cover 50 soccer fields. The hope is that another battery maker can be persuaded to take over the location.