Britishvolt in emergency funding talks to avoid pre-Christmas collapse

Britishvolt is holding emergency fundraising talks with carmakers and other potential investors that may lead to a sale of the business, as the battery start-up is at risk of running out of money before Christmas, according to three people.

The company is holding talks with seven possible “strategic investors” about options from assuming a minority stake to a full takeover, after recent market turmoil prompted traditional shareholders to pull out of its latest funding round. 

One suitor is India’s Tata Motors, owner of the UK’s Jaguar Land Rover, the people added, while other talks include at least one other carmaker and several energy companies. 

Three people with knowledge of Britishvolt’s financial situation said the company would collapse if it was unable to raise additional funds in the coming two months. 

The business needs to raise about £200mn to fund it until next summer, when it expects to receive the first orders from carmakers for its batteries, chief executive Graham Hoare told the Financial Times. Britishvolt shipped prototype cells to a handful of carmakers last month, and has received “tremendous feedback” so far. 

“The markets have radically changed in the last six months,” Hoare said. In two recent cases, potential investors had done due diligence but pulled out at the last minute over concerns about the UK market conditions, he added.

The company was “working to onboard a further strategic partner”, he said, while declining to give specific details.

Britishvolt has “a number of opportunities between now and the end of the year”, and is “confident we will find the right partner to engage with”, Hoare added.

The business is burning close to £3mn a month on pay after hiring almost 300 people, even though it does not expect to generate revenues until the middle of the decade, the FT reported last month. 

It has already delayed some investment plans at its factory site in Blyth, Northumberland, and closed an overseas office in the Middle East to preserve cash, according to people close to the company.

Recently, Britishvolt tried to convince the UK government to provide part of its promised £100mn grant funding earlier than planned. The money was only supposed to be drawn down as Britishvolt passed certain milestones, such as construction work beginning on its plant. 

There is hope within the business that ministers, who initially backed the plans, may provide some early funding for the company, one person close to the situation said. 

Britishvolt, which was founded in 2019, bought the Blyth site for £4mn in 2020, with the promise of developing the UK’s first “gigafactory” for electric car batteries. 

The company has signed early-stage research agreements with Lotus and Aston Martin, but has yet to secure orders from a big carmaker.

Asset manager Abrdn’s Tritax real estate unit is partnering with Britishvolt to provide funding for construction of the Blyth plant. Britishvolt has already delayed the expected start of production to 2025. 

The site, with its abundant land, cheap clean energy from an undersea interconnector, and deep seaport, is widely regarded as the best site to mass-produce batteries in the UK, and one of the best factory locations in Europe. 

Several companies including battery group Inobat have made inquiries with landowners about taking possession of the site in the event the company fails, according to two people. Hoare said the company had not breached any of the conditions on its ownership of the site.

Tritax is monitoring the start-up’s funding requirements, capital position and timeline for delivery, according to a person close to the business. 

Tata did not respond to requests for comment.