British Volt, a UK company which was looking to establish an enormous battery factory in Northern England collapsed recently, partly due to the failure of the British government to be forthcoming with £100 million of funding.
The funding had been conditional and the company basically failed the 'risk assessment' hurdles the government had put in place.
The factory was going to be the fourth largest in the UK, focused on producing batteries to power electric cars and was set to create 3000 jobs.
But it's not too risky for private capital.
In fact the factory is still going ahead, but now it's going to be built (potentially) by an Australian startup called Recharge Industries which put together and aggressive package to take over British Volt which included plans to build said factory for £3.8 BN.
NB there were THREE bidders overall for this take over which strongly suggests this project has a decent chance of succeeding even though this is no small infrastructure development proposal, so no surprise that while this is a start up the company is under the New York based investment firm Scale Facilitation.
The startup now plans to develop a 30 GWH factory in Northumberland and build Lithium batteries with materials free from Russia and China, reducing future supply chain risks.
The bidders were apparently most attracted by British Volts intellectual capital which included patents, designs, technical licences and supply chain partners which give the company a dominant position in the UK market.
And now with an Australian firm owning the company, and with Australia being one of the largest producers of Lithium in the world, it looks like the factory has a decent chance of succeeding.
A missed opportunity by the UK Government?
So what we have here is an innovative company looking to play a major role in the development of Britains' new green infrastructure and the government can't even find £100 million to support it.
I guess this is a case of the UK government having extremely risk averse investment criteria along with it being unwilling to be forthcoming with any additional funding.
This would have been a great opportunity for the government to commit to a
major project as part of a kind of new Green New Deal maybe within some sort of public private partnership.
The fact that there was so much interest from Private capital, and the final bid was 'aggressive' suggests this project has a good chance of success.
But now any profit generated from the factory is going to be leaving the country for Australia and the United States!
NB the take over deal still needs to be finalised.
@revisesociology I hear so many stories like this. Either liquidations or failure to commercialise. In the UK we are wonderful at innovation and creativity and early design. On the flip side we are pretty hopeless at "scaling" and "commercialising". The role of gov in seed or scale-financing innovation is a moot point. Sometimes it works.
Is it better than incubators/accelerators? Probably not (e.g. chat-GPT came out of Y-combinator in Sanfrancisco.
Is it better at sustainability when compared to organic growth (non equity or debt financed growth)? Probably not.
Do Government funded projects occasionally produce moon-shots that can change things? Occasionally e.g. CERN gave us Tim Berners-Lee and the WWW. DARPA in the US gave us TCP/IP and the Internet.
But in all the above they didn't give us Linux / Blockchain or Open source - perhaps the p2p economy needs to be credited more for truly good stuff.
BTW a UKCouncil CEO Once told me: "Innovate UK. You would be better to talk all their funding money. Dig a very large hole. A pour concrete over it. Most of that funding does more harm than good.
Having received a few million of funding from them over the years - I think he actually has a point!
Warmest!
I'm not entirely sold on the virtues of government funding, you make some fair points!
We may well just be better off without them!
I can say being reasonable doubt our government are incompetent. They are awful at having anything that is good for this country and very very very good at looking after themselves!
Obviously a big generalisation but sadly... quite true.
I'm a super optimist generally but....
Oh I'm sure they'll be alright whatever happens!
I'm not one to talk much about political things here, but I guess just another example of the government string-pullers doing what they do. I suppose if we (generally) knew exactly what was going on, we'd be at the gates with pitchforks and scythes like in the good old days. You know?
Don't worry mate, if any of that profit headed to Australia filters down to me, the lowliest Australian who ever lived, I'll put it in an empty Milo tin and save it up until you're down for a beer and some nosh at the local.
Well that's a nice thought, unfortunately I don't think enough of the profit will make its way to you to even afford to buy me a bag of crisps, let alone a pint!
I think you're right. I'd be happy to augment any profits that flowed my way with my own money though. So pints and nosh is back on!
I think they should give British Volt to you and not sell it to the Australian company.
Then we can all come for pints and 'nosh'!
Lol...pints and nosh for everyone!
Probably true - but what crisps would you go for?!
Plain, always plain!
love this comment and the idea that the money will filter down to your Milo tin (idk what that is but I'm guessing it's like a piggy bank?!)
Milo is a drink. As kids we'd turn the tin into a money box. (My parents were not well off so we were innovative.) https://www.milo.com.au/
I know this is a serious post and we're talking about something else but here... now I'll have to taste Milo's products too.
There will come a time when it will be convenient for me to move to Australia if every post a new product comes out lol!
Haha, yeah Milo is legit, good for winter.
Already looking for it 😅
So UK gov is as clueless as other countries ones, or just risk averse? I work in a gov job, and they cut 30 min of our jobs to save 80K only to buy an IT system that is not properly working for 1.2M. This is our gov.!
Money well spent.
That really does sound clueless!
Most big organisations are collectively clueless in my experience. And governments are the biggest. I think there are always some good people - but there are always selfish, greedy people too and often those one are the one that get themselves a lot of power...
Yet another missed opportunity - add it to the list.
I guess at least it will still be built in the UK.
Yes, I can't help compare this to HS2 - 5 times the cost (or whatever) and much less utility.
Just another reason to be fairly confident that the UK Gov hasn't got a clue.
Or they are so smart that they will snap it up once built at half the cost!
Unlikely.
It certainly seems that way!
I was just reading about this in the Guardian. It seems we need several factories like this for the British car industry to survive as they will have to switch to EVs soon and importing all the batteries is not viable. Seems to government did not actually put in the money it needed, but there may have been issues with the management too. Elon Musk did not build his battery plant here due to Br***t chaos.
Yeah I guess it's not the UK governments role to manage companies, but it does seem by inaction they are just residing over a declining country!
They do have a role in creating the right environment for industry to flourish, but they seem to care more about making rich people richer. The wealth is getting concentrated ever more.
Branson could be a good guy to lead the green revolution, he was great at promoting Virgin against BA.
True. What's he doing now anyway? Is it all space stuff?
Yes, he was doing he space trips the last I saw. I guess they need to find a new icon, perhaps a prodigy of Musk.
Unfortunate event, dear @revisesociology happened to a factory that was going to be the fourth largest in the United Kingdom, to think that in Venezuela there is so much shortage of batteries for electric cars, they are not even purchased here, because there is no such important factory for these products. Very good information, estimated, and the unfortunate thing is that it was going to have 3000 jobs, even more unfortunate. Thanks for informing. Good luck and thanks also for always visiting my yoga posts.