Britain’s Battery Boondoggle Goes Bust
Subsidies for electric-vehicle production fail at the first speed bump.
Jan. 22, 2023 5:52 pm ET
John Kerry boasted at Davos last week that the Inflation Reduction Act already has prompted the creation of 70 new battery companies in the U.S. The United Kingdom, meanwhile, boasts one fewer battery company after its green industrial-policy star failed last week.
Power by Britishvolt Ltd. entered administration on Tuesday and will be wound down at a cost of several hundred jobs. The startup, founded in 2019, was central to London’s green ambitions. Britishvolt was going to build a factory in northern England where 3,000 employees would produce lithium-ion batteries to support Britain’s electric-car industry. That industry doesn’t exist yet, and now neither will Britishvolt.
Britishvolt had faced financial troubles for a while and was undone by “insufficient equity investment for both the ongoing research it was undertaking and the development of its sites” in England, according to EY-Parthenon, the administrator winding down the firm. This happened despite the promise of subsidies of £100 million from the British government.
Britishvolt came to be at the center of former Prime Minister Boris Johnson’s green industrial policy, encapsulated by his plan to achieve net-zero carbon emissions by 2050. The company demonstrated the U.K.’s position “at the helm of the global green industrial revolution,” Mr. Johnson rhapsodized a year ago.
The subsidies didn’t arrive in time, however, and the government last year refused a request for a £30 million advance when it said Britishvolt had failed to meet certain milestones. The company also suffered from higher interest rates and Britain’s escalating energy costs. Fortunately for overtaxed Britons, the failure happened before anyone in London could write the subsidy check.
The climate brigade will argue this means London needs to throw more money faster at more startups to compete with eastern Europe and China. The real lesson is that the electric-vehicle market is so thin and so dependent on government mandates that not even the promise of government cash was enough to make such a company viable.
The main business case for Britishvolt or any other British battery firm is that the U.K. government plans to ban new internal-combustion-engine cars and vans by 2030 and hybrids by 2035. Yet as battery technology fails to advance enough to replace conventional engines, there’s growing reason to doubt London will stick to that mandate. If the government might not force consumers to buy a product that doesn’t drive as far as conventional cars or “refill” (recharge) as fast, why invest in producing it?
Yet even if London comes to its senses, this industrial policy will still harm Britain’s economy. Britain currently is home to a conventional auto industry that includes component manufacture and final assembly and employs some 156,000 in manufacturing.
Those car makers are on notice that London intends to push their current product off the market, and high land prices, wages, taxes and energy prices make it an uncompetitive place to produce the battery replacements. This risks shifting investment decisions within the next few years, even if politicians drop the electric-vehicle mandate.
The big winner so far is China, which may emerge as a competitive location to manufacture conventional cars, produces many of the rare-earth minerals necessary for EVs, and also still can afford to throw capital at battery plants in the West—such as the only currently operating battery factory in the U.K. If politicians insist on driving down this EV road, Britishvolt won’t be the last industrial-policy failure.
Source: Wall Street Journal
9 thoughts on “Another Greenie Project Goes Dead ”
There are a lot more failures to come to this segment of the auto industry. These EV companies cannot and will not survive without massive taxpayer subsidies, sadly, it appears only Toyota seems to get this reality. Too many of the other car manufacturers are again salivating, like they have with the traditional car manufacturing, at getting additional access to the taxpayer trough. These car manufacturers are masters at the government subsidization, grants, low or no interest loans, and a myriad of other government giveaways.
I have always looked, even admired, the hutzpah and ability of the auto and aircraft manufacturers, in Canada, to extract billions in subsidies from the federal as well as the provincial governments of Ontario and Quebec. Well, to be more accurate, the subsidies that Quebec gave to these sectors was, for all intents and purposes, delivered by Alberta in the form of equalization payments. No judgement here, just want to ensure credit is given where credit is due.
Might I also remind your readers that a major overall of every city, town, municipality, and province’s electrical infrastructure is required, if we are going to be able to effective charge ALL OF THOSE PROJECTED EVs, that are envisioned and being mandated.
My point, this is another massive boondoggle in the making, billions have been spent unwisely, trillions will need to be spent unwisely, before most figure out that EVs and their input materials (I.e. lithium batteries, new roadway charging stations, infrastructure upgrading materials ((mining, construction, etc.)) requires massive carbon fossil fuel utilization to mine all this stuff.
Of course, we don’t want to talk about the child labour used by Chinese (and others) mining firms to extract this lithium. Let’s not discuss the other rare earth materials that are used,( primarily supplied by China) to support the manufacturing of the EVs various components that are required.
Of course, we don’t want to discuss the absurdity of a critical supply chain, and, there are numerous at this juncture, that are resident in China. Yes, it reminds me of one of my professors saying in 1973, “Never, never, never allow your business to have one customer; if you do, you are a fool and it isn’t if you will fail but when.”
Might I turn this on its head slightly and say, “Never, never, never allow your Country to have one supplier of critical components, food, military supplies, energy, pharmaceutical drugs and medical supplies; if you do, you are a fool and it isn’t if you will fail but when.”
*****The EV approach sounds good until one delves into the irrationality associated with the entire “Movement”, and make no mistake it is a movement. The message we are to believe and accept is that EVs are going to reduce the overall amount of CO2 released into the atmosphere. I’m not aware that a ton of CO2 released by a gas driven vehicle is less of a ton of CO2 than that released by the mining of the needed minerals; the manufacturing of various components; the massive infrastructure upgrading required in virtually every community in Canada and around the world for that matter; ,
the hundreds of thousands, if not millions, of highway charging stations required in the world; the massive number of replacement batteries; the massive amount of energy required for the proper disposal of batteries; and, yes, the coal and gas fired plants CO2 release that will be required to supply the needed electricity.
Without having the exact numbers, let me suggest that saving the planet by reducing CO2 is a most noble, albeit a little misguided (actually, a great deal misguided) endeavour. However, I fail to see where reducing a ton of CO2 with an EV, that requires (in the entire process chain) multiple tons of CO2 release, is really helping the cause. The real differential hasn’t been sufficiently established to draw this “correlation and causation” model.
Again, accuse me of cynicism but the Math doesn’t seem to support the CO2 reduction. It is merely a symbolic gesture, by the snake oil salespeople like Al Gore, John Kerry, Greta Thunberg, Justin Trudeau, Jagmeet Singh, Elizabeth May, Rishi Sunak, Anthony Albanese, Jacinda Arden, Alexander De Croo, Emmanuel Macron, Francois Legault, David Eby, Rachel Notley, etc. that is without the required foundational pillars to support the absurd claims.
Yes, yes, I’ve read the various studies that suggest EVs, when considering the entire lifecycle produces about 20-30% less CO2 than a gasoline car. However, these studies were woefully lacking in considering all the changes required to support the EV mania. That is, they left out a lot of CO2 released highlighted in the above paragraph designated by *****.
Note: I’m an avid and proud environmentalist, have been all my life, and want to help stop the polluting of the planet. However, I’m not naive enough to think asking people around the world, especially the poverty stricken, to reduce their standard of living or be unable to feed their children—is going to be met with any serious degree of uptake—nor should it be. This is especially the case when they observe the behaviour of the Climate Change Evangelists who haven’t walked a millimetre of their inglorious bastards’ talk. Want to see Climate Change bigotry and hypocrisy in action, get a list of the Davos 2023 attendees and note the countries they represent.
Food for thought and those seeking the truth.
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Terry, I admire your sensible opinion peice. We have the masses taking up a narrative that is illogical much the same as which has just happened in the last 3 years with the, “safe and effective” clause spoken by non-scientists to get the scared masses to believe an experimental gene therapy was the answer to save the masses. Now it’s the false narrative, “Climate change” to scare our young populations.
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“John Kerry boasts”. I’d rather he could boast about atmospheric measurement and observations that demonstrate CO2 influence anything in the atmosphere.
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When John Kerry and others of his ilk start flying around the globe in BATTERY OPERATED ELECTRIC JET AIRCRAFT, then and only then will I have either the time or the will to pay attention to their dribble.
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Plant food is not fucking pollution.
Spent batteries are fucking pollution.
Apologies for the bad language, but it’s becoming appropriate.
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Of course, the Guardian puts its usual spin on the failure, that it is the government’s fault for not spending enough taxpayer money that would have been used much more wisely in the private sector, since the private sector has a stake in making a profit, and can lose money, reputation and property if they invest irresponsibly, while the government can and does lose billions or trillions without penalty to themselves. But at least the Guardian pointed out that the project never should have started:
“Britishvolt was always going to pose problems for the government. The company was starting from scratch in a field already crowded with large and innovative industrial firms, including Panasonic, LG, and CATL, the Chinese supplier to VW and probably the largest maker of lithium-ion batteries.
Britishvolt’s decision to develop its own battery was a high-risk plan given the levels of investment needed. Nor was any major car company committed to buying its wares. Its Swedish competitor Northvolt had followed a similar approach but with €350m of EU funds and major investors including BMW and VW.”
But one thing we can be sure of …. when the project started, a lot of leftist economic illiterates felt good.
I read a comment in a newspaper article almost a year ago by someone claiming to be in the electrical business saying that to charge anymore than 2 – 3 cars on any given residential street that all the electric cables under EVERY street in every village, every town, every city and every overhead cross country cable towers will have to be dug up and replaced with heavier cable to transmit more electricity to charge a street full of electric vehicles overnight. That will take years and trillions of dollars. Also count in the fact that most apartments and high rise condos do NOT have infrastructure for an electric plug at every indoor – outdoor parking spot.
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And for What??? C02 is plant food! What is it going to take for EVERYONE to just say enough is enough. Every day billions of ordinary citizen’s dollars are being blown away….for what?? They are encouraging child slavery for heaven’s sake! They are taking jobs away from million of families, causing family strife! Just think of the trillions of dollars over the past three decades that have been wasted on a NON-problem. Someone step up and stop this insanity please! 😦
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Green Energy is a lie.
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