The start-up planning one of the UK’s first gigafactories to produce electric car batteries is in advanced talks to secure at least £200m of government funding for its proposed facility in north-east England, according to three people with knowledge of the talks.
Britishvolt, which is backed by commodities giant Glencore, has been trying to tap the government for support for more than a year as it aims to become a large-scale battery producer with its £2.6bn gigafactory in Blyth, Northumberland.
The government has put securing car battery investment at the heart of efforts to sustain the UK’s auto industry, as ministers pursue ambitious plans to cut carbon emissions. The government’s plan to ban the sale of new petrol and diesel cars by 2030 and hybrids by 2035 will require vehicle plants to shift to producing electric models.
Ministers have set aside £850m to attract battery investment in the UK.
Britishvolt is also in advanced talks with several potential customers, including Vauxhall owner Stellantis to provide batteries, according to people with knowledge of the private discussions.
The total amount of UK government funding has yet to be finalised but, barring any last-minute hitches, will be between £200m and £250m, two of the people said. An agreement could be reached within weeks.
Recent UK electric investments from Nissan and its battery supplier Envision, as well as Stellantis and Ford have all received British government financial support.
Currently the only other major battery site in the UK is a plant at Sunderland that supplies Nissan, which the Chinese owner Envision wants to expand significantly.
Britishvolt declined to comment.
A spokesman for the business department declined to comment on the talks but said the UK government was “firmly committed to ensuring the UK continues to be one of the best locations in the world for automotive manufacturing, as highlighted by the recent announcement of the new Envision AESC gigafactory in Sunderland”.
An injection of government funding into Britishvolt would provide the latest stamp of approval on a project that was initially viewed with deep scepticism.
Founded in 2019, Britishvolt had no in-house technology, serious financial backing, or agreements with any customers when it began scouting for a site for its first factory.
The company has since secured the Blyth site, reckoned to be the most promising in the UK for a gigafactory, and began construction work over the summer.
In August it raised about $70m in a series B round, with new investors including Glencore, that valued the company at more than $1bn. Executives are exploring listing the business next year. It is developing in-house technology and has hired recognised industry battery experts.
The company said roughly two-thirds of its first 10GWh of batteries had been “earmarked by potential customers” but declined to comment on the names provided by the Financial Times.
Stellantis, which plans to build an electric van at its Ellesmere Port site, is keen to source batteries for the project within the UK if possible to lower transportation costs.
But Britishvolt and Stellantis are also in wider talks on supplying batteries to other electric cars made outside the UK, three people said.
Stellantis, which was formed by the merger of PSA and Fiat Chrysler earlier this year, has a joint venture with Total to produce batteries in Europe and the US but has also said it is also open to buying additional batteries from other suppliers. The carmaker declined to comment on Britishvolt.
The other companies in talks with Britishvolt include Arrival, a recently listed electric bus and truck company, Tevva Motors, a UK start-up that develops electric trucks, and Lion Electric, a Canadian commercial vehicle group, the people said. Arrival and Tevva declined to comment. Lion Electric did not reply to a request for comment.