Britishvolt collapse should spark debate on whether it was actually needed
The collapse into administration of Britishvolt will rekindle concerns for the long-term future of the British car-making industry.
The sector is under extreme pressure to pivot from making cars powered by the internal combustion engine to electric vehicles (EVs). To that end the UK government has decreed that, from 2030, no new petrol or diesel cars will be sold in the UK.
Central to that transition to EVs is the need for a number of new ‘gigafactories’ – plants that could produce electric car batteries at scale – and the Johnson government had targeted at least seven or eight of them.
The assumption among industry analysts is that, due to the weight of EV batteries and the expense of transporting them, they need to be located near to the carmakers. Hence the need to build them in the UK.
That need for local sourcing is amplified by ‘rules of origin’ provisions in the UK’s Brexit deal with the EU which require that 70% of a battery must be built in either the UK or the EU for the EV it powers to be sold tariff-free in the bloc. Four in every five British-built cars are exported and just over half of them are sold to countries in the EU.
It is why Britishvolt was promised £100m from the Automotive Transformation Fund, the £850m taxpayer-backed programme aimed at supporting the electrification of Britain’s automotive supply chain.
So the failure of Britishvolt will be seen as a severe setback to the country’s ambitions for EVs. It casts doubt over what is one of only two gigafactories in the UK towards which meaningful progress was being made, the other being built at Sunderland by the Chinese battery maker Envision, which is partnering Nissan locally.
Yet some will argue it is premature to extrapolate Britishvolt’s woes to wider prospects for gigafactories in the UK.
Britishvolt has been seemingly cursed from the off.
Its co-founder, Lars Carlstrom, left the company nearly three years ago after it emerged he had been convicted for tax offenses in his native Sweden. There was then confusion when the company announced its factory would not be in Bridgend in south Wales, as originally intended, but at Cambois near Blyth, in Northumberland, where it had been offered more attractive financial incentives to locate.
The original South Wales site was selected on the basis of access to key markets and a skilled local workforce
In the meantime, the company continued to rack up costs, with the monthly salary bill for its 300 employees reported to be £3m.
Britishvolt then pushed back the planned start date for production to 2025, blaming Russia’s invasion of Ukraine for pushing up costs, while a request for government support was made. It later emerged that management had put the company on what was described as ‘life support’ in July.
Then, in August last year, Mr Carlstrom’s co-founder, Orral Nadjari, unexpectedly resigned.
Orral Nadjari
The Guardian newspaper subsequently reported details of his extravagant spending, revealing that the company had leased a seven bedroom £2.8m mansion with a swimming pool and jacuzzi for executives, as well as hiring a Dubai-based fitness instructor to conduct yoga classes for staff remotely.
Lack of firm supply deals with carmakers
Graham Hoare, the respected former head of Ford of Britain, was hired in his place as an interim chief executive and, in November, the company secured an emergency lifeline from Glencore, the commodities trading and mining giant, which was one of its shareholders.
But at the heart of its problems was that it had never signed firm supply deals with carmakers sufficient to guarantee future revenues of the kind that potential investors would have wanted to see.
All it had were preliminary agreements with two luxury carmakers, Aston Martin and Lotus, to design batteries for their EVs.
The future for the Blyth site hangs in the balance
Last week, the company said it was in talks to sell a majority stake in itself to a consortium of investors in order to secure its future, but those came to nothing.
Today brought the news, which had seemed increasingly inevitable, of administration.
That need not be the end of the story.
Britishvolt’s main asset, the site at Cambois, is well-located close to a deep-water port and enjoys both good rail links and access to clean energy from Norway. It is highly likely to attract potential buyers.
India’s Tata Motors, the owner of Jaguar Land Rover, has been suggested as a possible buyer although it is hard to see why it would want to own a site in Blyth when a site in Coventry, much closer to the bulk of its manufacturing facilities elsewhere in the West Midlands, remains possible for development.
The bigger questions and concerns
Perhaps the bigger question – and concern – is how many car manufacturers will be in need of British-made EV batteries come the end of the decade.
Honda has already closed its plant at Swindon in Wiltshire while Stellantis, the Fiat, Peugeot and Citroen combine, is ending volume car production at Ellesmere Port in Cheshire and converting production there to electric vans and cars whose battery cells will be sourced on mainland Europe.
Mini’s owner, BMW, has confirmed the next generation of the model’s electric version will be built not at Cowley in Oxfordshire but in China. And it is not yet clear from where the luxury British carmakers Rolls-Royce and Bentley, respectively owned by BMW and Volkswagen, intend to source their batteries as they switch to EV production. Nor are Toyota’s intentions clear for its site at Burnaston in Derbyshire.
The biggest question of all concerns Jaguar Land Rover which, it seems, is likely to be relying on European production for at least some of the batteries powering its UK-built vehicles.
So perhaps the bigger worry is not the lack of gigafactories but whether they will actually be needed amid declining output from British-based volume car producers.
Consumers could be allowed to attend water company board meetings under new rules proposed by the regulator.
Companies may survey and research customers to understand their views, involve them in decision-making and seek feedback on consumers’ experience.
Under the suggested reforms by regulator Ofwat, customer voices could be heard by making changes to a company’s governing body, the board of directors.
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The obligation to hear billpayers’ views could be met by boards allocating time for consumer matters, arranging for consumer experts to attend, holding open board meetings for the public, or by having an independent director with a consumer focus.
Boards could also comply by arranging for independent consumer experts, such as the Consumer Council for Water (CCW), to regularly attend.
Topics that consumers will have to be consulted on include the cost of bills, performance of key water services, support when things go wrong – like water outages – and the company’s investment priorities.
When decisions likely to materially impact consumers are made, the water company needs to have clear processes to ensure consumers are involved, Ofwat said.
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As well as including water users in decision-making, utilities will have to work to understand how decisions impact consumers so those views are taken into account in future decisions.
Seeking this feedback must involve engaging with the new consumer panels being developed by the CCW to hold companies to account, Ofwat’s rules outline.
Why’s this being done?
It’s all part of the government’s aim to rebuild trust in the water sector and to improve accountability, transparency and performance in water firms.
The public has been outraged by record sewage outflows and polluted waterways at a time when senior executives are receiving bonuses and bills are rising.
New powers were granted to regulator Ofwat to clean up the sector, and rules on pay and bonuses were developed and took effect in June.
They’ve already been used to claw back bonuses.
What next?
Stakeholders have until 1 October to respond to the consultation, with Ofwat intending the rules take effect on existing water utilities in April.
Consultations already took place to make the suggested rules with 11,000 responses received from businesses, groups and individuals.
Not all of the replies made their way into the rules. The idea of having MPs and local authorities involved in decision-making, received from “several respondents”, appears not to have been included.
It comes despite the recent announcement of Ofwat being scrapped, as part of a once-in-a-generation review of the sector.
It and the other regulators are to be replaced by one single body.
Ofwat said it was working until new arrangements were in place and continuing to implement rules on remuneration and governance.
How’s it been received?
Environmental charity River Action said to rebuild trust in the industry, the government “needs to go a lot further than tinkering around the edges”.
“We need a complete overhaul of how water companies are owned, financed and governed. That means ending privatisation and instead operating for public benefit,” chief executive James Wallace said.
Industry group Water UK said: “It is important customers are involved in water companies’ decision-making.
“We will continue to work with government on these proposed rules and other vital reforms to secure our water supplies, support economic growth and end sewage entering our rivers and seas.”
More than 200 UK pubs closed in the first half of the year as part of a “heartbreaking” trend which industry bosses fear is set to accelerate.
Analysis of government figures revealed 209 pubs were demolished or converted for other uses over the opening six months of 2025 – around eight every week.
The South East was hit the hardest, losing 31 pubs during the period.
It means 2,283 pubs have vanished from communities across England and Wales since the start of 2020.
Industry bosses said the “really sad pattern” is being driven by the high costs faced by pubs – and called for government reforms to business rates and beer duty.
Many pubs have been hit by changes to discounts on business rates, the property tax affecting high street businesses.
Hospitality businesses received a 60% discount on their business rates up to a cap of £110,000 – but this was cut to only 25% in April.
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Pub owners had warned such a move would place significant pressure on their industry.
Last month, the owner of a pub told Sky News “you can’t make money anymore” and “it’s not surprising so many pubs are closing at an alarming rate”.
‘Staying open becomes impossible’
A rise in the national minimum wage and national insurance payments have also increased bills for pubs.
Alex Probyn, of commercial real estate specialists Ryan, which analysed the government data, said the higher costs are “all quietly draining profits until staying open becomes impossible”.
He added: “Slashing business rates relief for pubs from 75% to 40% this year has landed the sector with an extra £215m in tax bills.
“For a small pub, that’s a leap in the average bill from £3,938 to £9,451 – a 140% increase.”
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‘A lot of these pubs never come back’
Emma McClarkin, chief executive of the British Beer And Pub Association, said: “It’s absolutely heartbreaking and there is a direct link between pubs closing for good and the huge jump in costs they have just endured.
“Pubs and brewers are important employers, drivers of economic growth, but are also really valuable to local communities across the country and have real social value.
“This is a really sad pattern, and unfortunately a lot of these pubs never come back.
“The government needs to act at the budget, with major reforms to business rates and beer duty.”
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