Australia-based company Recharge Industries will take over collapsing battery maker Britishvolt after closing a deal with administrators on Sunday night in the UK.
The deal revives hopes for the construction of a £3.8bn (A$6.7bn) “gigafactory” in northern England, the backbone of a plan to modernize Britain’s auto industry and supply the next generation of electric vehicles manufactured in the UK.
The deal was finalized three weeks after Recharge, an Australian company under New York-based investment firm Scale Facilitation, was nominated as the preferred bidder, representing a huge opportunity and burden for a startup that has not built a project yet.
Australian-born founder and chief executive of Scale Facilitation, David Collard, told The Guardian that the factory and an associated supplier park, where the components are made, remained a focus.
“We are working closely with one of the UK’s leading fund managers looking to team up on development,” Collard said.
Recharge also plans to build a battery factory in Geelong, a former car manufacturing hub in Australia, free of Chinese and Russian materials.
Britishvolt planned to build its 30 GWh factory in phases to take advantage of growing demand for EVs ahead of the UK’s 2030 ban on new petrol and diesel cars. The plant, located near Blyth in Northumberland, was expected to employ around 3,000 people when operating at full capacity.
He had £100 million in conditional funding from the British government, but failed to overcome a number of hurdles.
Britishvolt collapsed last month after running out of cash, its demise partly blamed on the considerable sums it spent on battery technology and research. Part of Recharge’s argument centered on its existing relationship with US lithium-iron battery developer C4V, eliminating the need to develop new technologies.
The BBC first reported the termination of the deal with EY administrators. It means the revived Britishvolt could make batteries using Australian minerals, including lithium, American technology and British manufacturing, which represent the same three countries in the Aukus trilateral security pact.
Collard said the company would initially focus on “developing a strong UK-specific business plan with global alignment.”
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Recharge has signaled its interest in producing batteries for energy storage and the defense industry, which differs from Britishvolt’s original goal of making electric batteries for 300,000 vehicles a year.
The Recharge bid won the support of the British government’s trade envoy to Australia, former England cricketer Ian Botham. It outbid existing investors from Britishvolt, private equity firm Greybull Capital and HSBC-backed Saudi British Bank.
The UK will need 10 high-volume battery manufacturing facilities, or gigafactories, by 2040, according to British research body The Faraday Institution. It currently has one, a Chinese-owned battery plant next to Nissan’s Sunderland factory, and lags behind many European nations.
The future of car manufacturing is closely tied to battery production, as car brands look to unite production facilities. China is the world’s dominant manufacturer of electric vehicle batteries.