The UK startup’s struggles to keep its flagship gigafactory project in England alive have forced it to pull the plug on a proposed second battery cell factory in Quebec

The UK-based technology and manufacturing firm Britishvolt is abandoning plans to set up a battery manufacturing plant in Canada, the company announced this week.

Last October, Electric Autonomy Canada exclusively reported plans for the startup to build a 60GWh battery cell gigafactory, an R&D centre and anode and cathode processing facilities in Bécancour, Que. The company even set up an office in Montreal and hired former Quebec premier Philippe Couillard to lobby the federal government to secure funding for the project.

But now, over a year later, a spokesperson from the company tells Electric Autonomy in an email statement that the project has come to an end due to “worsening global economic conditions” and the “very significant reduction in available investment capital.”

In addition, the recent U.S. Inflation Reduction Act, which authorized $391 billion in spending on energy and climate change initiatives, was cited by Britishvolt in the email as “having an impact on the economic viability of largescale climate projects in other parts of North America.”

“This was a difficult decision to take given the growing interest from potential battery cell customers in Canada, the positive engagement of the Quebec Government, and the important role the country plays in the North American auto and aeronautical sector,” says the spokesperson.

“Having a strong footprint in North America remains a key part of Britishvolt’s business growth strategy and we still hope that we can return to discussions in Canada at some point in the future.”

Britishvolt’s financial woes

Britishvolt’s decision to end the operations in Canada comes as it is battling financial troubles to stay afloat and support the construction of its £3.8-billion, 30GWh battery facility in Northumberland, England.

In February, it raised £40 million from mining giant Glencore. But then earlier this month, Britishvolt was running out of funds and narrowly missed being taken under administration. It reportedly was saved by an investment worth less than £5m from Glencore.

“The result is we have now secured the necessary near-term investment that we believe enables us to bridge over the coming weeks to a more secure funding position for the future,” said Britishvolt in a press statement at the time.

Around 300 staff members have also agreed to take pay cuts until December to reduce short-term costs and help the company make it to the start of the new year as it continues to search for additional funding.

The battery startup is also waiting on a £100m investment promised to them by the British government as part of the Automotive Transformation Fund (ATF). The funds from the government are payable only after the construction of the factory has started. However, due to financial setbacks, the project has been postponed several times.

Originally, the production of battery cells at the plant was scheduled to start at the end of next year, but was pushed back to the end of 2024 and then again to mid-2025.

Britishvolt asked to withdraw £30 million from the ATF funds, but the request was turned down by the government in late October.

In this context, scrapping the plans to build a battery plant in Canada is hardly a surprise.

“We believe the most responsible near-term action we can make is to concentrate on getting our high quality, advanced technology battery cells to market in the quickest and most cost-effective manner. This means focusing on our R&D and scale-up facilities in Europe which are key drivers to achieving this goal,” says the spokesperson in the email.

If financial support for the factory is secured on time, the Northumberland gigafactory is expected to produce enough batteries for over 300,000 EVs each year. It will also directly create 3,000 jobs and another 5,000 indirect jobs in the supply chain.