industrials

Britishvolt wins further Glencore backing in latest funding round

The UK start-up with ambitious plans to build a battery gigafactory to help equip the nation’s car industry for an electric future has secured renewed support from Glencore in a £200mn funding round.

Britishvolt said the miner and commodity trader would be the cornerstone investor in its Series C financing, which is being opened to new and existing shareholders.

Glencore has committed £40mn at a significantly higher valuation than its previous investment in Britishvolt, according to the company.

The previous deal, which also included an agreement to supply the gigafactory with battery raw material cobalt, valued Britishvolt at more than £774mn ($1bn).

The company declined to provide further details.

The launch of the Series C financing round comes weeks after Britishvolt raised £1.7bn in sale and leaseback funding from warehouse provider Tritax and investment group Abrdn to construct its factory in Northumberland.

That deal was made possible by a grant of about £100mn from the Automotive Transformation Fund, a pot of cash the UK government will use to try and woo battery developers to the UK.

“Our interactions with the capital markets show that demand for low-carbon, responsibly manufactured batteries is rapidly growing,” said Britishvolt’s chief investment officer Kasra Pezeshki.

Britishvolt’s gigafactory, to be built on the site of a power station coal yard in Blyth and due to start production in 2024, will be the UK’s fourth-biggest building.

At its peak, the plant aims to produce enough cells for 300,000 electric car batteries a year. The company estimates it will create more than 3,000 direct jobs and an additional 5,000 in the local area.

To help finance the project, which could cost as much as £3.8bn to complete, Britishvolt has been considering a listing on the London Stock Exchange. It plans to use funds raised in the latest round to advance construction, buy machinery and finance a dedicated research and development centre.

The UK government wants to attract battery investors to safeguard the country’s car industry as its shifts towards making electric vehicles. But to do that the country will need to build a supply chain so key battery raw materials, including lithium and graphite, can be processed into the chemicals used in gigafactories.

Figures submitted to Department for Business, Energy and Industrial Strategy and reported by Sky News on Friday showed that the UK will have just half the battery manufacturing capacity it needs by the end of the decade, when the government plans to ban sales of internal combustion engine cars.

Britishvolt plans to send the first samples of its battery cell to potential customers this year. It has already signed memorandums of understanding with four manufacturers and is in talks with Aston Martin about producing electric batteries for its luxury cars.

The £40mn investment by Glencore marks a further strengthening of ties between the companies. They are planning to develop a recycling plant for lithium-ion batteries in Kent that will process all of the battery manufacturing scraps from the Blyth gigafactory.

The funding round is being led by Bank of America, Citibank and Peel Hunt. Britishvolt has appointed Lazard as its financial adviser.

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