UK startup Britishvolt has secured a new investment worth £40m from Glencore in the latest stage of its ambitious plan to build one of the UK’s only large-scale battery factories.
It aims to triple its funding with £200m in a third funding round, with Glencore serving as lead investor. The FTSE 100 miner has already invested millions of pounds in Britishvolt in previous funding rounds that valued the battery company at over $1bn (£740m).
The battery factory project is seen as key to the outlook for the UK car industry as it moves away from internal combustion engines and embraces battery electric vehicles with zero carbon emissions from exhaust gases.
The global battery supply is dominated by manufacturers in China, Japan and South Korea, but Europe and the United States are racing to catch up.
The UK government has already backed the Britishvolt project with £100million from its car transformation fund, which aims to stop the car industry and thousands of jobs from moving elsewhere. Britishvolt is developing battery technology ahead of the construction of a factory at the government-funded UK Battery Industrialization Center in Coventry.
It has already carried out preparatory work at its site near Blyth in Northumberland, with construction due to start in April. Construction of the site was supported by Abrdn, an institutional investor formerly known as Standard Life Aberdeen, and Tritax, a real estate investor partly owned by Abrdn, under a sale-leaseback agreement.
This deal will ultimately be worth £1.7 billion to fund the factory, the necessary infrastructure, such as delivering the large amounts of energy needed to manufacture car batteries, and a supplier fleet and a rail connection along the main site. The money will be disbursed in installments as the project develops.
Britishvolt was founded in 2019 by Orral Nadjari, a former investment banker. So far he has raised around £100m and he is in talks with the Canadian government to use the same model there. Its latest fundraising efforts will be led by US investment banks Bank of America and Citibank alongside London-based investment bank Peel Hunt, with another bank, Lazard, hired as financial adviser.
Four separate automakers, including sports car maker Lotus, have signed memorandums of understanding with Britishvolt. It said that represented a cumulative demand for batteries with a capacity of 7 gigawatt hours by 2024 and 2025, a significant part of the 30 GWh it plans to build each year – although the agreements do not guarantee orders for batteries.
Kasra Pezeshki, Chief Investment Officer of Britishvolt, said: “We are increasingly excited about the number of potential growth and investment opportunities available to the business. Our interactions with capital markets and customers show that the demand for responsibly manufactured, low-carbon batteries is growing rapidly day by day.
The UK has only one other firm commitment to build batteries in the country: a major expansion of Envision’s plant in Sunderland which was built to serve Japanese automaker Nissan’s plant. Projects in Coventry and Somerset are also looking for investors.