Brexit blamed for Britishvolt collapse in huge blow as the UK's EV dreams knocked

Former Conservative Party Leader William Hague has claimed that Brexit is part of the reason why Britishvolt collapsed. The firm, that was planning to build the UK’s first gigfactory, was in prime position to build a £3.8billion factory producing batteries for electric vehicles (EVs) in what was going to be a huge boost for the EV rollout. But earlier this week it was announced the firm had collapsed – with many being made redundant.

As a result of financial trouble, lawyers for Britishvolt filed a notice of its intention to appoint administrators with the insolvency court, triggering 206 redundancies and an end to its dreams of setting up the gigafactory in Blyth, Northumberland.

According to Lord Hague, “part of the damage” of was the UK’s departure from the EU. He told the News Agents podcast: “That is very concerning and it’s a sad reflection probably on Brexit.

“Because what do you need in some of these technologies? You need scale. You need to know there’s a big market. If you’re going to succeed with batteries, you’re going to need big manufacturers to be in the same market using those batteries.”

He added: “So that’s part of the damage that’s been done by leaving the EU.”

Reports have suggested that Telsa and Twitter CEO Elon Musk had been interested in setting up a gigafactory in the UK, but chose Germany over Britain due to Brexit.

He told trade magazine Auto Express in 2019 that uncertainty over the UK’s decision to withdraw from the EU “made it too risky” to establish its European battery facility in the country. However, James Morris, the editor of niche electric vehicle publication Which EV, argued that “Brexit or no Brexit, the UK is still a very lucrative automotive market after all”.

It came after Tesla’s Berlin plant suffered a wave of delays due to German red tape, ahead of opening in March 2022.

Mr Morris wrote back in December 2021: “You do have to wonder if Elon Musk is considering it a rather bitter pill dealing with the bureaucracy that he has faced setting up the Gigafactory in Berlin.

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“Even when the plant opens, this is likely to continue, looking at past history in Europe. Perhaps, as the EV market continues to grow, local UK manufacturing could end up back on the table. Brexit or no Brexit, the UK is still a very lucrative automotive market after all.”

Even with Britishvolt now out of the race to set up the first gigs-factory in the UK, understands that there is still plenty of opportunities for other firms to get involved in.

One market metals trader, on condition of anonymity, told “It’s highly likely that companies such as Tesla, Northvolt AB, Tata (which owns Jaguar and Landrover), Freyr, Rivian, and other European battery cell developers and producers are looking at the business.

“It has promising technology and a site that is probably, if not definitely, the best in the country. Supportive policy is what’s really needed, especially after the US turned up the heat with the Inflation Reduction Act.

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“Risk is, all the talent slinks off to the US and the UK is left dead in the water. That would be truly heartbreaking. What we need now is collaboration. As such I predict plenty M and A on the European battery patch in the next few years.”

Sir John Redwood, MP for Wokingham, told that he agreed the project “could be revived”.

However, he warned that the Government “is trying to go too fast, top-down, by saying they are going to stop people making and selling petrol and diesel cars before they have got in place all the replacements that people want to buy.

“In order for this revolution to take off…it needs the enthusiasm of customers. We are lacking the Mini or the Beetle of the electric cars at the moment.”