Britishvolt is preparing to enter administration as early as Monday after the troubled UK battery start-up failed to secure additional funding, according to three people with knowledge of the matter.
The company, which has been developing a £3.8bn gigafactory in north-east England, has been in emergency fundraising talks for weeks after running down its cash pile.
It was trying to raise £200mn or to sell the company outright and had been in advanced talks with a number of potential buyers, including India’s Tata Motors, which owns Jaguar Land Rover.
A spokesperson for Britishvolt, which is backed by FTSE 100 mining group Glencore, declined to comment.
The pending collapse marks the end of a dream, promoted by former prime minister Boris Johnson, of a homegrown battery champion for the UK, but paves the way for a more established manufacturer to take over the proposed factory site in Blyth, Northumberland.
Any administration is likely to trigger a rush to secure the rights to the Blyth location.
Several other companies have been in talks with landowners to express their interest in the Blyth site, which is reckoned to be one of the best in Europe for battery manufacturing because of its deep seaport, rail links and clean energy.
Automotive leaders and analysts had always questioned the company’s strategy of setting up a factory before securing firm orders from a car manufacturer, rather than the established industry pattern of finding a customer and then building a plant.
Recently, the business’s current leaders have been trying to raise smaller sums in order to buy further time for a large salvation injection. The company has around one month’s cash left, according to two people briefed on the matter.
One proposal under discussion involved an attempt to secure short-term funding to try and tide over Britishvolt’s operations until a larger deal or acquisition could be done, two people said. Some talks were continuing on Monday.
Ministers promised the company £100mn, but the funding was only to be drawn down as construction work hit a certain milestone, which has not yet been reached. Britishvolt executives had been trying several government avenues to unlock further financial support.
Within the past month, the company diverted funding from the site in Blyth to some of its battery work in order to try to preserve its dwindling cash reserves and to generate orders that would give it badly-needed revenues.
Separately on Monday, black cab maker LEVC has said it will lay off about 20 per cent of its staff, or around 140 roles.
The Geely-owned maker of the electric black taxi and an electric van has been struggling with sales during the pandemic and blamed supply chain disruption and the “global economic challenges” for the move.
LEVC is expected to launch a new wave of products next year that it hopes will increase sales.
Last year, the business delivered 1,620 vans and made a £118mn pre-tax loss.