London There is not much to see on the industrial wasteland in Blyth in the north east of England. The UK’s first battery gigafactory is to be built on the former site of two coal-fired power plants in the coming months. “Like a phoenix from the ashes,” says Orral Nadjari. The founder of Britishvolt says he has checked more than a hundred locations. “This is the best location for a battery factory in Europe,” he sums up.
The Swede explains in a video interview from his place of residence in Abu Dhabi that the deep-water port is an advantage so that the finished battery cells can be delivered to all of Europe in a few years. The submarine cable from Norway, which is supposed to supply the factory with green electricity, also ends here.
New gigafactories in Europe are currently being announced every month. Governments and automakers see the establishment of a domestic battery production as a strategic step to make themselves independent of China. Experts are already warning of a battery bubble: the demand is estimated at 900 gigawatt hours per year by 2030. However, capacities of 1200 gigawatt hours have already been announced.
Nadjari, on the other hand, thinks little of the bladder theory. Announcements didn’t mean the factories would actually be built, he says. Most of the projects don’t even have a building permit. The demand for battery cells will therefore exceed the supply in Europe for years to come.
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If everything goes according to plan, Britishvolt could be one of the first to meet this demand. The company has had the building permit since July. The entrepreneur praised the British authorities in just four months. The first preparatory work on the site began in September. The factory is expected to produce the first battery packs at the end of 2023. It is to be gradually expanded to its full capacity of 30 gigawatt hours by 2027. That would be enough for 300,000 battery packs.
Northvolt as a role model
Nadjari founded the start-up in 2019 together with his Swedish compatriot Lars Carlstrom. At that time he worked as a partner at the private equity firm Jool Capital Partner in Gothenburg and headed the office in Abu Dhabi. However, co-founder Carlstrom soon resigned from the past due to a tax scandal and founded the rival company Italvolt in Italy.
The inspiration for Britishvolt came from the Swedish battery manufacturer Northvolt, which the two ex-Tesla managers Peter Carlsson and Paolo Cerruti founded in 2017. Carlsson is the pioneer, enthuses Nadjari. “He paved the way.” He also names Tesla founder Elon Musk as a role model.
Like all battery companies, Nadjari benefits from the political hype surrounding e-mobility with Britishvolt. In Great Britain, the Conservative Prime Minister Boris Johnson has proclaimed the “green revolution”. On Monday he affirmed the further expansion of the charging infrastructure at the annual conference of the employers’ association CBI.
A battery manufacturer with the patriotic-sounding name Britishvolt suits the Prime Minister as a model example. On top of that, the new Gigafactory in the de-industrialized north of England would create 3,000 jobs in a future-oriented industry. So it fits in with Johnson’s “leveling up” agenda. Because of the huge amount of attention, Britishvolt experienced a “meteoric rise,” says Nadjari. After only two years it is already a well-known brand name on the island.
The number of employees has grown from 15 to 135 this year.
(Photo: Britishvolt)
However, there are still considerable question marks at the start-up: So far, Nadjari has neither secured the financing nor has permanent customers at hand. Talks were underway with the government over £ 200 million in subsidies, British media reported in October. Nadjari does not want to confirm the number. A funding application has been submitted and there is a “very good dialogue”, he says.
In general, he is full of praise for the funding measures in Great Britain. Since 2017, the government has invested hundreds of millions of pounds in developing the battery industry. As part of the “Faraday Battery Challenge”, the state has developed a “leading global ecosystem,” says the founder.
Britishvolt, for example, uses a government-funded laboratory at Warwick University. The UK Battery Industrialization Center, which opened in July, is also open to the company, where prototypes are further developed towards mass production. Thanks to the public facilities, he has saved £ 150 million in investment costs, says Nadjari. “And I’m four years faster, because that’s how long it would take to build such a facility myself.”
However, Britishvolt needs new sources of funding to meet the Gigafactory’s estimated £ 2.6 billion construction costs. In August, the company raised $ 70 million in Series B funding – valued at $ 1 billion.
Is the IPO coming?
Mine operator Glencore was among the investors. The global corporation wants to supply the start-up with cobalt in the future. It’s a win-win situation, says Nadjari. Britishvolt is securing supplies of cobalt directly from the market leader, and Glencore is advancing its ESG agenda by joining the battery manufacturer. ESG stands for environment, social and governance investment criteria.
There is no shortage of investors, emphasizes Nadjari. “Billionaires, hedge funds and large construction companies sit at my table.” However, it will probably not work without an IPO. A decision has not yet been made, but it sounds like the founder decided in favor of London over New York. “My preference is the London Stock Exchange because we are called Britishvolt,” he says. The company was also built up with local employees and government support. The number of employees has grown from 15 to 135 this year. There are also 185 external consultants.
It remains to be seen whether Britishvolt can make it without the support of an auto company. The company is currently still working on cell chemistry and the simulation of production processes. Meanwhile, competition is growing: the big car manufacturers are planning their own battery factories or are teaming up with battery manufacturers.
The competition is not far in Blyth either: In Sunderland, where Japanese car maker Nissan operates the country’s largest car factory, Nissan’s Chinese battery partner Envision wants to expand an existing small battery factory into a gigafactory with a capacity of 38 gigawatt hours per year. Nadjari is calm, but it wouldn’t be the desired punch line if the Chinese were to build the first British gigafactory in the end.
More: These are the most important battery projects in other European countries