In 2019, the British start-up Britishvolt was set to revolutionise the European battery industry and make Britain an independent player in the era of electric mobility. Four years later, a company valued at over 800 million pounds collapsed with debts of 160 million, and its visionary plans for a gigafactory in Blyth lay in ruins. The Britishvolt story is not just a tale of one bankruptcy – it is a chronicle of errors that reveals the systemic weaknesses of European industry in the face of Asian dominance.
When Orral Nadjari and Lars Carlstrom registered the company Power by Britishvolt Ltd in December 2019, few suspected that four years later the firm would become synonymous with a spectacular failure of the European battery industry. Britishvolt was founded to fill a critical gap in the British electric mobility supply chain. At the time of the company’s founding, Britain had only one battery factory – the Chinese Envision AESC in Sunderland – while the European Union was planning or building 35 such plants. This very gap was supposed to be the driving force behind Britishvolt’s ambitions.
The company’s founders, however, had no experience in industrial-scale battery production. Nadjari was a Swedish former investment banker, Carlstrom was a Swedish automotive entrepreneur who left the company as early as December 2020, when details of his earlier conviction for tax fraud in Sweden came to light. Carlstrom later claimed that the matter was brought up after he disagreed with Britishvolt’s decision to hire quickly and develop its own battery technology.
Despite these controversies, Britishvolt managed to convince top-tier investors, including mining giant Glencore, equipment rental firm Ashtead and property investor Tritax owned by the abrdn group. The company quickly achieved unicorn status – its valuation exceeded one billion dollars, and investors also included Norway’s Carbon Transition and Indonesia’s VKTR, which joined the list of supporters just a month before the company began to face serious financial problems.
Luxury in the shadow of crisis
From the very beginning, Britishvolt was a project of not only industrial but also political character. The company planned to build a gigafactory in Blyth, Northumberland, on post-industrial land where a power station once stood. The investment was to cost 3.8 billion pounds and ultimately produce 30 gigawatt-hours of batteries per year – enough to power hundreds of thousands of electric cars. The factory was expected to create about 3,000 direct jobs and indirectly thousands more in the supply chain. It was the largest industrial investment in north-east England since Nissan arrived in the 1980s.
The project was enthusiastically received by Boris Johnson’s government, which saw it as an opportunity to deliver on its „levelling up” policy – equalising opportunities between the wealthy south and the poorer northern regions. Johnson personally praised Britishvolt as a „pioneer of EV batteries” creating „thousands of jobs”. Northumberland was one of the key „red wall” constituencies – traditionally Labour districts that switched to the Conservatives in 2019, which strengthened the political significance of the project.
The government offered support of 100 million pounds from the Automotive Transformation Fund, but this money was conditional – it was to be paid only after certain construction milestones were achieved. Political support, however, proved more declarative than real. When Britishvolt asked for an advance of 30 million pounds from the promised 100 million in 2022, the government refused, arguing that the company had not made the required progress in construction.
This decision, though formally justified, plunged the company into even greater financial difficulties. As one former manager later commented, the government treated Britishvolt as a political tool but was not willing to bear the risk of actually supporting it.
As Britishvolt’s ambitions grew, so did its spending – in a way that, in hindsight, appears at least controversial. The company rented an office in London’s Mayfair district, one of the most expensive in the capital, as well as Newfield House – a seven-bedroom residence for 2.8 million pounds east of Blyth, which was to serve as office space. Some employees felt uneasy about the impression created by these luxury expenses at a time when the company still had neither a single customer nor a finished product.
As was later revealed, Britishvolt also employed a team in Canada headed by former Quebec premier Philippe Couillard, further increasing operating costs. At its peak, the company employed over 300 people, and its spending on consultants, including EY, which was deeply involved in creating the business plan and company structure, often exceeded spending on employees themselves. EY – which is particularly ironic – would later become Britishvolt’s administrator in bankruptcy. Insiders claimed that EY „wrote the entire business plan from scratch, did everything”, and three senior Britishvolt managers, including the finance director, were hired from EY in 2021.
The company’s spending raised questions not only among market observers but also among employees themselves. One former manager recalled that the atmosphere inside the company was full of contradictions – on one hand, employees were aware of the project’s enormous potential; on the other, they saw that money was being spent in a way that was difficult to justify in business terms. Renting a luxury residence in Blyth instead of a more modest office in the area was for many a symbol of detachment from reality.
The company also rented expensive cars for management and organised integration events on a scale that did not match the financial situation of a start-up. These expenses, though at the time might have been justified by the need to build prestige and attract investors, in retrospect proved to be one of the symptoms of a deeper problem – a lack of financial discipline and a sense that money would flow forever. At its peak, the company was spending about 5 million pounds a month on operating costs alone, not counting investment in construction.
A desert of contracts and technology. No foundations for building an empire
This cash burn rate proved unsustainable, especially when the company was generating no revenue. Internal reports, obtained by the media, estimated that Britishvolt would need at least 200 million pounds in additional funding to survive another year. Meanwhile, investors began to lose patience, seeing that the company was not achieving its stated milestones. Subsequent funding rounds proved increasingly difficult to secure, and the conditions set by investors became more restrictive. By December 2022, the company had only a few million pounds in the bank, enough for just a few weeks of operations. This situation was not only the result of excessive spending but also of the lack of a realistic financial plan that would account for possible delays and obstacles on the road to starting production.
The most fundamental problem for Britishvolt, however, was the lack of a real product and customers. The company had no signed contract with a car manufacturer for battery supplies. Its technology was still in the development phase, not – as with competitors – proven and ready for scaling. Britishvolt tried to fill this gap by buying a German battery cell manufacturer in May 2022 for 32 million pounds, but the transaction did not bring the expected results – and the amount spent on the acquisition proved equal to the value for which the entire company was valued a year later. The acquisition of the German company was supposed to give Britishvolt access to proven technology and an experienced engineering team. In practice, however, the integration of the two companies proved more difficult than expected, and the technology was not adapted in time to the scale of production required by the Blyth gigafactory. Moreover, the purchase consumed a significant portion of the cash that the company could have spent on other purposes, and it did not bring the expected results in terms of accelerating the schedule.
One of Britishvolt’s most serious mistakes was the belief that car manufacturers would wait for its product, even though the company could offer neither a competitive price nor supply security. In the meantime, competitors such as Northvolt were signing multi-year contracts with the biggest market players. Northvolt, founded in 2016 by former Tesla manager Peter Carlsson, built its strategy around partnerships with BMW, Scania and Volkswagen, who were also its shareholders. Northvolt delivered its first batteries in 2022, had one operating gigafactory, three in planning and an order book worth 55 billion dollars. Britishvolt had none of this. Attempts to cooperate with car manufacturers ended in failure, as potential customers were not convinced of the company’s ability to deliver such a complex project on time and with the required quality. As a result, when Britishvolt finally needed financial support, it could not rely on any long-term contracts that would convince investors to commit further capital.
The lack of contracts also had other, more subtle consequences. Without commitments from car manufacturers, Britishvolt could not precisely determine what types of batteries it would need to produce and in what quantities. This in turn prevented the optimisation of production processes and investment planning. The company had to design the gigafactory based on general assumptions that could prove outdated by the time production started. Investors, aware of this risk, were reluctant to commit capital to a project that could turn out to be technologically inadequate to the actual needs of the market. Added to this was the issue of trust – Britishvolt repeatedly changed its plans and declarations, which in the eyes of potential partners made it an unreliable entity.
The final straight. Months of agony and collapse
As early as July 2022, just a month after Indonesian VKTR joined the list of investors, Britishvolt put the construction of the Blyth gigafactory on life support and halted construction work. As the Guardian revealed, the company was then in deep financial crisis. In August 2022, work was completely suspended due to financing difficulties. In October, the company closed its small administrative and financial office in the United Arab Emirates, trying to concentrate on key activities. In November 2022, Britishvolt withdrew from plans to build a gigafactory in Quebec, Canada. That same month, the company secured a short-term investment that was supposed to give it a few weeks to find more stable funding. Employees voluntarily agreed to temporary pay cuts, and management did not receive full salaries in December.
Despite these desperate measures, the situation was already beyond saving. The company sought rescue in several ways. In the last quarter of 2022, Britishvolt held talks with several potential investors, including the DeaLab Group fund, which valued the company at only 32 million pounds. This transaction, however, was blocked by creditors, who considered the offer too low and insufficient to cover their claims. The creditors, among whom were both large financial institutions and smaller suppliers, demanded a higher amount or full satisfaction of their claims. At the same time, Britishvolt tried to persuade the government to accelerate the payment of the promised 100 million pounds, but the ministry remained adamant, arguing that the company had not met the terms of the agreement.
In January 2023, Britishvolt officially entered administration, and most of its 232 or, according to other sources, over 300 employees were immediately made redundant. EY was appointed as the administrator to handle the sale of assets and repayment of creditors, to whom Britishvolt owed as much as 160 million pounds. The final rescue attempt – a takeover by DeaLab Group – did not materialise because creditors blocked the transaction, and the company ultimately found no buyer capable of financing its operations. As was later revealed, Britishvolt’s management had considered the possibility of insolvency as early as summer 2022 but was hoping for a miracle that never came. In April 2024, the Blyth site was sold for the construction of a data centre, which was the final blow to dreams of British battery independence. Britishvolt eventually entered liquidation in November 2024, its assets were dispersed, and its debts were never fully repaid.
A lesson for Europe. What remains after Britishvolt?
After Britishvolt’s collapse, in February 2023, a glimmer of hope appeared. Australian start-up Recharge Industries, owned by US fund Scale Facilitation, announced the acquisition of the company. Recharge planned to resume construction in Blyth by the end of 2023, initially focusing on batteries for energy storage and then on production for sports cars in cooperation with technology partner C4V. Unfortunately, this attempt also ended in failure. Recharge Industries was unable to finalise its financing agreement, and its plans were never realised. The gigafactory site, which was to become a symbol of the British industrial revolution, was allocated for a completely different purpose, delivering the final blow to dreams of British battery independence. The British government promised that by 2040 every new car sold in Britain would be zero-emission, but without domestic battery production, this goal remains a pipe dream.
The Britishvolt story is not just a tale of one start-up. It is a cautionary tale for the whole of Europe, which in the race for dominance in battery production for electric mobility still lags behind China. European ambitions to build an independent battery supply chain are crashing against hard economic realities: enormous investment costs, long production cycles, a lack of experienced staff and difficulties in competing with Asian giants that have decades of development and state support behind them.
Britishvolt was not the first or the last European battery manufacturer to fail. In 2025, Northvolt also collapsed, showing that the problem is systemic and not limited to a single company. Both cases have much in common: a lack of proven technology, a lack of customer contracts, enormous investment costs, management problems and insufficient state support.
Europe is still looking for an answer to the question of how to build a competitive battery industry that is not dependent on China. So far, it has not found one. The collapse of Britishvolt and Northvolt is a signal that political will and ambitious plans alone are not enough. Real investment, long-term strategies, partnerships with the automotive industry and consistent support at every stage of development are needed.
Without this, the Britishvolt story will repeat itself, and Europe will remain dependent on battery imports from Asia, losing the chance to build its own independent industry in a technology crucial to the future. Britishvolt was supposed to be the answer to this challenge, but it became one of the most painful chapters in the European story of the energy transition. Its legacy is not just empty construction sites and unpaid debts, but above all a lesson that in the race for the future of industry, it is not enough to dream – one must know how to build.
Fot. BBC
