Australian startup Recharge wins bid for collapsed UK battery company Britishvolt
Feb 6, 2023, 12:12 PM
An emerging Australian company yet to construct a major project will be responsible for delivering on UK hopes to electrify its automotive industry after outbidding rivals to take over collapsed battery maker Britishvolt.
In a whirlwind fortnight, Recharge Industries put together an aggressive package that also revives plans to build a £3.8bn (A$6.7bn) “gigafactory” in the north of England to supply the next generation of UK-built electric vehicles, free from Chinese materials.
The Australian company, which sits under New York-based investment firm Scale Facilitation, beat three other offers to become the preferred bidder to take Britishvolt out of the hands of administrator EY.
The deal still needs to be finalised, which would trigger a process of paying back creditors.
“After a competitive and rigorous process, we’re confident our proposal will deliver a strong outcome for all involved,” Scale Facilitation’s Australian-born founder and chief executive, David Collard, said in a statement on Monday.
The ambitious startup strategy means Recharge will now work simultaneously on rebuilding Britishvolt and its planned facility while also pursuing pre-existing plans to build a battery facility in Geelong, a former car manufacturing hub in Australia.
Recharge’s pitch to administrators lent on strategic and diplomatic ties, and received support from the British government’s trade envoy for Australia, ex-English cricketer Ian Botham. The startup plans to build lithium-ion batteries free of materials from China or Russia, reducing risks to supply chains.
“I strongly believe any premium we may end up paying is reflective of our bullish view on the untapped opportunity the UK market provides us,” Collard told the Guardian late last week.
Britishvolt was planning to build the 30GWh factory on a vast site near Blyth in Northumberland in phases to take advantage of rising EV demand ahead of the UK’s 2030 ban on new petrol and diesel cars. The plant was expected to employ about 3,000 workers when operating at full capacity.
If completed, the factory would be the fourth-biggest building in the UK.
Britishvolt had £100m in conditional financing from the British government but failed to meet various hurdles to receive the funding.
Bidders were particularly interested in Britishvolt’s intellectual property, according to one person close to the administration process, which includes patents, designs, supply chain partners and territorial licences that give the holder a dominant position in the UK.
Administrators also received bids from existing Britishvolt investors, private equity firm Greybull Capital and HSBC-backed Saudi British Bank, the Financial Times reported.
Recharge’s management team includes several people with military backgrounds in a nod to the company’s plans to build batteries for defence industries.
The defence industry is renowned globally as an innovator and an industry that is dependent on batteries and storage for a whole suite of applications,” the Recharge chief executive, Rob Fitzpatrick, said in an interview last month.
Recharge relies on battery technology from American lithium-iron battery developer C4V. If the Britishvolt deal is finalised, Recharge could potentially make batteries using Australian minerals, US technology and British manufacturing, representing the same three countries in the Aukus trilateral security pact.
The Australian government last week launched formal consultations to develop a national battery strategy to promote Australia as a source of battery minerals and expertise around the world.
Australia is the world’s dominant lithium producer but has historically struggled to develop processing facilities for its mineral riches.
Shannon O’Rourke, the chief executive of the government-backed Future Battery Industries Cooperative Research Centre, said it “takes a lot of time and money to manufacture high-quality batteries at scale”.
But he said Recharge likely had a head start over rival bidders for Britishvolt because it had key partnerships like its C4V battery technology arrangement in place.
“Batteries, like energy, are important to national interest. Secure supplies of batteries are also essential to underpin electric vehicle manufacturing ecosystems,” O’Rourke said.
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