Hundreds of employees have lost their jobs as the British electric car battery company Britishvolt went into administration.
The majority of Britishvolt’s 232 employees have been laid off, according to administrators, after the group’s application for administration to the courts on Tuesday, January 17.
It came after talks with investors about a possible sale to keep the company afloat.
A total of 26 employees will be retained to help sell the remaining business and assets.
Britishvolt has been on the verge of bankruptcy since £100 million in promised government funding to build a planned battery gigafactory was delayed due to missed investment targets.
The move will have ramifications for British automakers, who, according to experts, require battery factories to prevent much of the country’s car production from shifting to mainland Europe.
A Department for Business, Energy and Industrial Strategy spokesman said: “As part of our efforts to see British companies succeed in the industry, we offered significant support to Britishvolt through the Automotive Transformation Fund on the condition that key milestones – including private sector investment commitments – were met.
“We remained hopeful that Britishvolt would find a suitable investor and are disappointed to hear that this has not been possible, and therefore no ATF grant has been paid out.
“Our thoughts are with the company’s employees and their families at this time, and we stand ready to support those affected.
“The UK is one of the best locations in the world for automotive manufacturing, and we want to ensure the best outcome for the site. We will work closely with the local authority and potential investors to achieve this.”
According to the Unite union, Britishvolt’s insolvency could be “potentially catastrophic” for both the North East and the UK’s automotive transition.
Britishvolt CEO Graham Hoare told Sky News in November staff had agreed to a “substantial” temporary pay cut as it considered its financial future.
The £3.8 billion gigafactory project in Northumberland’s Port of Blyth was backed by £1.7 billion in private funding.
However, private financing was provided on the condition a portion of the funds would be released provided the government aid was paid.
It is reported the company had to look for funding elsewhere last year because the Department for Business, Energy and Industrial Strategy (BEIS) thought it had not fulfilled certain requirements in order for the £100 million payment to be made.
The company proposed producing power cells for 300,000 electric vehicles at the Blyth Power Station, which would eventually have created jobs for 3,000 people.
The company was praised by former Prime Minister Boris Johnson, who said the factory will “boost the production of electric vehicles in the UK”, and cement the country’s place “at the helm of the global green industrial revolution”.
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But in October of last year, Labour claimed it was obvious that the government was to blame for the company’s financial difficulties.
Shadow business secretary Jonathan Reynolds said at the time: “It is a sight that has become all too familiar – businesses going under, jobs being lost and investment in the industries of the future going abroad rather than the UK.”
Source: Sky News