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Huge UK electric car battery factory on ‘life support’ to cut costs

August 12, 2022

By Paul Homewood

 

h/t Dave Ward

From the Guardian:

 

 

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Construction of a huge electric car battery factory that has attracted tens of millions of pounds of taxpayer cash and been hailed as a flagship project of Boris Johnson’s levelling up policy has been put on “life support” to cut spending, leaked internal documents suggest.

Work on Britishvolt’s 95-hectare site near Blyth in Northumberland has been severely limited until February to minimise spending as it focuses on unlocking its next round of funding and critical power supply infrastructure, the documents suggest.

Britishvolt, which since its formation in 2019 has made a string of increasingly ambitious promises about powering the boom in electric cars, chose the “life support” option in order to “minimise cash out”, the presentation dated 25 July suggests.

Britishvolt and ISG, its main construction contractor, said the pause affected only some parts of the project while they awaited final designs which are due in October. Britishvolt said “life support” in the documents only referred to specific “packages of work as we optimise the design”.

Battery factories for electric cars are seen by the UK government as essential to preserving high-volume car manufacturing in Britain. Business minister Kwasi Kwarteng last month confirmed state support thought to be worth tens of millions of pounds for the factory, which is planned to employ 3,000 people by 2028 in an area previously left behind by industry.

The state support, first promised as early as January, was confirmed on 27 July, two days after the date on the documents seen by the Guardian.

The documents also discuss “mitigations … to deal with immature design and design release delays” ahead of an institutional investor contract due on 5 September.

Britishvolt has attracted an increasingly stellar cast of backers including FTSE 100 commodities trader Glencore, FTSE 100 equipment rental company Ashtead, and Tritax, an arm of Abrdn, a major institutional investor. Aston Martin and Lotus have also formally said they are interested in buying batteries from Britishvolt.

It has said its factory will be the fourth-biggest building in the UK and the sixteenth-biggest in the world.

Britishvolt claims the backing announced so far could eventually be worth more than £1.7bn, a significant share of the estimated £3.8bn that may be required. However, the company will only receive the money in stages as it achieves milestones.

https://www.theguardian.com/environment/2022/aug/12/huge-uk-electric-car-battery-factory-on-life-support-to-cut-costs 

Given the policy decision to ban the sale of conventional cars in 2030, a car battery factory would appear to be a financial banker, with a large, guaranteed market price. Surely then private sector investors would be piling into this project?

Of course, with rocketing prices and global shortages of raw materials, its not quite as attractive after all!

49 Comments
  1. HotScot permalink
    August 12, 2022 10:44 am

    Shocking…….

    Had to be said.

  2. August 12, 2022 10:44 am

    “Right now, there is a global race to secure electric vehicle manufacturers.

    As Business Secretary, my job is to ensure we grab as much market share as possible.

    Nissan, Ford, BritishVolt, Vauxhall and Bentley are doubling down in Britain, but there’s more to do

    • Gerry, England permalink
      August 12, 2022 2:21 pm

      ‘I think…’

      That’s an oxymoron if ever I have seen one.

    • bobn permalink
      August 12, 2022 6:13 pm

      Once again a socialist cock-up. Rather than let market forces decide what to build and how big, how fast, we have Govt interference distorting markets and the economy. Parliament, having engineered a fuel crisis and a cost of living crisis now want to add another white elephant to their collection (HS2 being such a good investment).
      If Parliament got out of the way we would have coal mines, coal fired power stations, cheap energy and a prosperous nation. But Parliament wasnt going to let the market provide prosperity. Parliament wants, and is getting, poverty for all.

      • Gerry, England permalink
        August 13, 2022 10:28 am

        As we are seeing complete failure in all areas in this country I think you can pin the blame on the spread of ignorant left-wing views. Look at the 2 main parties Red Labour and Blue Labour where most of the MPs are interchangeable. You have increasingly incompetent heads of NGOs, government agencies and corporations who are either fully left-wing or are left of centre.

    • HotScot permalink
      August 12, 2022 10:50 pm

      Your job, Kwasi, is to deal with politics, not business, a function you are uniquely unsuited to.

      Businessmen “grab as much market share as possible.” politicians should stick to living under their bridge.

  3. woodburner0 permalink
    August 12, 2022 10:50 am

    BritishVolt: A bit of a flat battery factory…

    • HotScot permalink
      August 12, 2022 10:51 pm

      A Flattery factory.

  4. GeoffB permalink
    August 12, 2022 11:11 am

    Here is the comment I put on the local business when the story broke….The company behind it, Rolton had outline planning permission for an Incinerator here in Washington (part of Sunderland) and I, along with many others, was totally against its building on a retail park with domestic properties and schools adjacent, It was going to supply Nissan with 20MW of cheap energy, so had to be close to their factory. Surprisingly we won. All 20 Councillors on the planning committee voted against it (one just abstained). While we put up a good case, Rolton’s arrogance and poor communications made them an easy target. In the end Sunderland having more or less giving them the go ahead for the building paid them £1.78 million to go away. The other 4 projects of this nature near car plants were all approved, but I do not think any have been built. (one was Swindon for the Honda plant, now closed.)

    GeoffB
    2 DAYS AGO
    I always thought Britishvolt was not really viable, making batteries with 3000 direct labour and 5000 in the supply chain, competing with slave labour in China as well as fully automated factories in the East is just not realistic. Also China’s stranglehold on the raw materials is against them. I wish them well, but I spent 6 years transferring production to China, running a Chinese factory for 2 years, all to reduce manufacturing costs.

    • catweazle666 permalink
      August 12, 2022 3:44 pm

      Not to mention practically unlimited cheap energy from a multitude of coal fired plants, GeoffB.
      Looks suspiciously like yet another money black hole to me!

    • HotScot permalink
      August 12, 2022 10:54 pm

      I have oft repeated that, in response to the decline of the Clydeside shipyards, if you want to compete with the far east, you will have to pay far eastern wages.

  5. Gordon Hughes permalink
    August 12, 2022 11:14 am

    The really interesting thing is what is not said in this article.

    There are two scenarios for the future of large batteries. One is that they become a commodity item, so that an unaffiliated factor like this sells to a number of vehicle manufacturers – not just cars but small trucks, etc. That is, in effect, the bet being made by BritishVolt. The second – and more plausible – scenario is that batteries are seen as a critical component for large vehicle manufacturers which they want to control in terms of design, etc. That is the Tesla option and is almost certainly the way in which Toyota, Nissan, etc will want to go.

    Anyone who expects the second scenario would look for firm contracts with large vehicle manufacturers before committing to funding such a project. Lotus and Aston Martin are niche producers and don’t qualify. That is the real issue here: this is a highly publicised but speculative venture that will only come off if they get contracts with vehicle manufacturers. Given their location that almost certainly means Nissan and I suspect that they hope the project will be bought out by Nissan. Whether that is Nissan’s view is another matter.

    You can think of Kwarteng as being a useful salesman – he doesn’t know what he is talking about but maybe he has some sway over Nissan or Toyota. That is probably optimistic, they are used to dealing with clueless politicians but they will make their decisions on more cautious and rational grounds.

    There are lots of similar projects being floated around the world. A small number will attract funding and, in typical style, the Guardian is gullible enough to be used by the sponsors of this project in their efforts to raise support and money. This is what you get when ignorant (an ideological) journalists deal with business PR types!

    • Dave Andrews permalink
      August 13, 2022 5:09 pm

      I thought Toyota teamed up with Panasonic to produce EV batteries?

    • MikeHig permalink
      August 15, 2022 10:00 pm

      The second scenario is the way things have gone so far: Tesla with Panasonic; Kia/Hyundai with LG and so on.
      How do British Volt and the govt think they are going to break into those established relationships with loads of proprietary tech, etc? There’s no mention of any huge advance in technology which is about the only thing that might attract one of the major manufacturers.

      • catweazle666 permalink
        August 16, 2022 12:14 am

        The problem that isn’t going to go away is energy density.
        A lithium-ion battery pack has an energy density of 0.46-0.72 megajoules per kilogram, diesel has an energy density of 45.5 megajoules per kilogram, around 60 times the density, best case.
        If the diesel tank is run full to empty, then this is effectively doubled.
        It’s going to take more than the current incremental improvements that are touted weekly to close that gap.

  6. Orde Solomons permalink
    August 12, 2022 11:37 am

    As a former worker in the Li-ion battery industry, I have to agree with Gordon Hughes. In addition, many long term projects of this nature, even private industry ones can be short circuited by changing business environments and rendered failures. Government lead plans are even more prone to this for reasons too obvious to enunciate.

  7. August 12, 2022 11:40 am

    The irony is off the scale.

    These massive power price increases will result in companies upping prices, or moving abroad. Expect mass unemployment soon. That is, unless we eject these lunatic governments.

  8. Phil O'Sophical permalink
    August 12, 2022 11:42 am

    “that has attracted tens of millions of pounds of taxpayer cash.”
    Strange turn of phrase. I am a taxpayer and I wasn’t attracted to spend my money on it. What it attracted was the virtue-signalling green establishment to waste even more taxpayer cash.

  9. Harry Passfield permalink
    August 12, 2022 11:43 am

    Britishvolt has the same ring about as British Rail. Not quite as recognisable as Duracell. Product names can make or break a sale.

  10. Malcolm permalink
    August 12, 2022 11:44 am

    Of course batteries will not become a standard commodity component of cars (but maybe of houses).

    Designers want to package them in a variety of ways. More important they want to have latest technology that the others do not have.

    This is another brainless government “picking winners” projects like all those that failed in the sixties and seventies. They all think they know best without having any experience.

    • Robert Christopher permalink
      August 12, 2022 12:17 pm

      It’s not so much simple brainless ministers as STEM averse ministers who are brainless because they think, having a first from Oxbridge in an Arts or Humanities subject, gives them the knowledge and experience to make any judgement on a STEM project BEFORE any suitable Scientist/Engineer of goodwill, in this case patriotic, is involved.

      What do they think Science/Engineering undergraduates do while they are studying Chaucer (after woke warnings?) or Greek mythology?

      The arrogance is incredible, though there may be one or two that may be ‘gathering intelligence’ for an imminent change in policy. (I hope so!)

    • M Fraser permalink
      August 12, 2022 1:09 pm

      Houses powered by batteries!
      Firstly the risk of fire would put me right off.
      Secondly, working for the PO telephones a colleague sat on top of the batteries in the Telephone exchange for 30ish years and died of a pretty nasty cancer, obviously not related. But good luck with that , no thank you.

    • catweazle666 permalink
      August 12, 2022 3:50 pm

      “(but maybe of houses)”

      Having some experience of the vagaries of lithium batteries, I wouldn’t want one anywhere near my house!

  11. Gamecock permalink
    August 12, 2022 12:14 pm

    ‘Battery factories for electric cars are seen by the UK government as essential to preserving high-volume car manufacturing in Britain.’

    1. Government making business decisions.

    2. Electric cars will never be a high-volume business. Mandating electric cars won’t create demand. It just means you kill the existing car business.

    3. Expertise in car manufacturing doesn’t translate to expertise in battery making.

    4. Ditto above: who are your customers going to be? You really should have them lined up before you pour concrete.

    5. Ditto above: from whom are you going to get your raw materials? At what price?

    Building this factory is speculation with other people’s money. This looks like government spending money to SHOW it can work, not necessarily expecting it to work, or even how it could work. They are positioning government to where it will have to MAKE it work. I.e., they are on the path to totalitarianism.

    • Robert Christopher permalink
      August 12, 2022 2:05 pm

      “Government making business decisions”

      They are making decisions before anyone with the appropriate knowledge and experience has been publicly involved.

      There is no Traceability and, therefore, no Accountability.

      They are not taking Risks, they are taking Chances, with other people’s money.

      Typical Socialists! They don’t have a clue about ANYTHING, but like taking decisions, in ignorance, for our own good.

      Your other points are some of the details hanging off that first point. They act as though they are oblivious to the:
      LOGIC – your point 3 could be because they see them as similar: they understand neither 🙂
      SCIENCE – until there are Scientific breakthroughs, it’s impractical, and they cannot be taken at face value
      ENGINEERING – where is the Overall Plan and the experienced Engineer (working for the taxpayer, not the supplier) who is responsible for ensuring good practice, that is, not letting money go to waste?
      SUPPLY CHAIN – 2 years to build a car factory, but 10 to 15 years to develop a mine for the required metals: who’d have thought it?
      BUSINESS – I have lost the will to describe how appalling this is from someone in the Tory Party who is the Minister of Business (and Industrial Strategy).
      GEOPOLITICS – currently, most metals needed for the Green Transformation are not sourced in the West
      POLITICAL – any accountability for the decisions made with this discarded PM will be lost to History, but it may show whether Kwarteng has his head screwed on the right way. He has noticed the woodchip burning Drax, so he should be on his guard.

  12. Mad Mike permalink
    August 12, 2022 12:48 pm

    DeLorean comes to mind.

    • woodburner0 permalink
      August 12, 2022 2:00 pm

      Well said! Never give a sucker an even break…

    • HotScot permalink
      August 12, 2022 10:55 pm

      Linwood.

    • August 14, 2022 7:52 am

      Llanwern & Ravenscraig

  13. Ed P permalink
    August 12, 2022 1:26 pm

    Designing a new factory with a manual UK labour force is idiotic – most worldwide battery production is, or about to be, highly automated. This appears to be a typical British ‘solution’, bound to fail: insufficient up-front capital investment resulting in permanently higher running costs. Another fine mess, Stanley!

    • woodburner0 permalink
      August 12, 2022 2:05 pm

      Apropos Mad Mike’s comment regarding de Lorean, in the 70s the British motor industry was trying compete against the highly-automated Japanese companies, and it wasn’t until British Leyland built the Honda Ballade as the Triumph Acclaim that the rot was stopped (or in the case of the Acclaim, not…)

      • catweazle666 permalink
        August 12, 2022 4:39 pm

        Anecdote from the time when Honda were negotiating with BL to build their cars under license in the UK:
        Honda and BL engineers were inspecting the blueprints, BL engineers shook their heads and announced the blueprints were no good because there was a vital element missing.
        “Really?” said the Honda engineers, “they look all right to us, they’re what we use, what’s missing?”
        “The tolerances” said the BL engineers.
        The Honda engineers replied “what are tolerances”?

      • woodburner0 permalink
        August 12, 2022 6:31 pm

        Very good!

  14. mwhite permalink
    August 12, 2022 2:15 pm

    And once the factory has been completed

    https://www.sharecafe.com.au/2022/08/12/markets-flat-ev-carmakers-struggle-with-soaring-raw-material-costs/

    “Across the market Carmakers’ battery plans are at risk as raw material costs soar. It appears that there’s a lot of investment in battery cell manufacturing in Europe and the US, but not sufficient enough in the raw materials”

    • Dave Andrews permalink
      August 13, 2022 5:15 pm

      The IEA said earlier this year that it foresaw worldwide shortages of lithium and cobalt as early as 2025.

  15. Gerry, England permalink
    August 12, 2022 2:25 pm

    We know battery cars will never become the norm as it has been shown that there is not enough raw material being mined to deliver the intentions of everyone around the world. And that is not just for vehicles but for storage batteries. The politicians are obviously too stupid to understand this but I wonder about the car makers.

    • Penda100 permalink
      August 12, 2022 5:02 pm

      But I am sure there will be enough for everyone who is allowed one.

    • August 13, 2022 8:56 pm

      The carmakers are at the mercy of the politicians. Atlas Shrugged.

  16. Richard Bell permalink
    August 12, 2022 2:27 pm

    Being British and looking at the UK from the outside ( I live in rural Arizona USA ) the whole electric car thing looks like a massive WHITE ELEPHANT ……. Ask the question where this factory is going to get its raw material ? Ask the question what average UK resident will be able to afford an electric car, plus the charging infrastructure problems ? Ask the question where is the eclectic supply coming from to charge these batteries ? ……. The government funding would be much better spent on Fracking and the production of Natural Gas Energy to bring down the cost of Energy for the British people.

    • Mad Mike permalink
      August 12, 2022 3:44 pm

      I’ve been around over 70 years and I’ve seen numerous government backed, with good hard cash, start ups, lame duck supports etc. and I can’t ever recall any of them becoming a business success.

      When are governments going to realise that their job is to provide the right regulatory environment for businesses and just stand back. It’s not their job to pick winners. The private sector can do that for sure. The right regulator environment, as well as making the UK a good place to do business, is also an area where companies have to behave themselves. I cite the water companies getting away with not drastically cutting down on leaks and mobile phone operators getting away with not providing universal coverage which is an outrage in this day and age.

      This current factory has got failure written all over it. Not because batteries will not be needed in numbers but the competition is already too strong for a small endeavour coming late to the party.

    • Gamecock permalink
      August 12, 2022 10:12 pm

      Good questions, Richard.

      I think USians have more single family dwellings than Brits, so charging stations is less of a problem. UK EV owners not owning a charging station – or having insured access to one – is a big derailer.

      And the electric supply issue is ironic. One branch of government crushes electricity production while another branch insists on EVs. You couldn’t make this $#|+ up.

  17. Frank permalink
    August 12, 2022 3:07 pm

    Reports are showing that the European Commission may be classifying lithium as a dangous material by 2023, either banning importation or increasing regulations so much that the major German battery manufacturer may have to close. How this might affect this UK flagship battery manufacturer is not clear.
    https://news.metal.com/newscontent/101856562/eu-says-no-to-lithium-and-the-underlying-causes-are-worth-attention

  18. Bill Francis permalink
    August 12, 2022 3:15 pm

    I don’t know if the British government is still following Klaus Schwab’s directives, but if it is, the private motor vehicle is doomed, and it looks like the only batteries BritishVolt will be making will be for e-bikes – something they could most likely do in a garage.

    • Curious George permalink
      August 12, 2022 6:47 pm

      It looks like the United Kingdom is doomed.

  19. roger permalink
    August 12, 2022 3:35 pm

    British Volt unfortunately is condemned by history and simple economics to fail, and for the govt to disassociate itself as best it can from the debacle.
    British Volte-Face on British Volt Factory may well be the headlines when it fails, and the heading on the historical footnote in future records.
    Thus are the inadequacies of a quarter of a century of Tony Blair’s thrice times education and the fifty percent with a University degree who could not see this coming, revealed.

    • Gamecock permalink
      August 12, 2022 10:15 pm

      My contention is they will force it to work. Sieg heil!

      • Robert Christopher permalink
        August 13, 2022 12:15 am

        Just like those very fuel efficient German diesel cars? 🙂

  20. Robert Christopher permalink
    August 13, 2022 12:11 am

    Déjà vu!

    News from Canada:
    “As it happens, the bureaucrat in charge of crafting one of the world’s “strongest vaccination mandates in the world”, according to the bureaucrat herself and Trudeau, has an undergraduate degree in English literature and self-evidently didn’t have the scientific knowledge to take a call. Neither were there any doctors, epidemiologists and scientists on her team, a secretive panel whose membership is nowhere published, and which rates a passing mention on the government’s website.”
    https://www.telegraph.co.uk/news/2022/08/12/tyranny-justin-trudeau-has-finally-exposed-two-brits-no-less

  21. John Dowling permalink
    August 16, 2022 4:05 pm

    Hi Paul, many thanks for the continuing update of futilities. I have seen several mentions of a report by Volvo purporting to show identical cars, battery and IC, crossing over on cost and materials at around 90,000 miles. Do you have a link to this report, I’d like to puncture the local misconceptions about how wonderful are EVs? many thanks John

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