British Bolt is ‘very risky project’, government should stay away from it: energy expert

Energy experts say Britain should give up plans for a gigafactory to make electric car batteries and accept that it cannot compete with countries with lower labor costs.

Startup British Vault, which had planned to build a huge factory in Bryce, Northumberland, took control earlier this month with £100 million in debt to its creditors.

Andy Meyer, chief operating officer and energy analyst at the Institute for Economic Affairs (IEA), said the British Vault would always be a “very risky project” and the government would either walk away from it or deal with the DeLorean case. We should risk repeating ourselves, he said.

Mayer told the Epoch Times: It failed because the specific representation of the technology was not sufficient. I wasn’t ready. No one really wanted to buy. So government funding won’t change that. ”

British Bolt plans to build a £3.8 billion Gigafactory on the site of a former coal-fired power plant in the north of England, which will employ 3,000 people a year and produce 300,000 cars and vans. It says it makes batteries.

In January 2022, the government announced plans to put £350m into a net zero strategy, adding to the £500m invested in the 10 points scheme as part of its leveling up agenda. England and the Midlands will keep up with London and the South East even further.

Former Prime Minister Boris Johnson said the British Bolt factory would become part of Britain’s “global green industrial revolution”, opening in 1986 and employing thousands of people in areas of high unemployment, Nissan in Sunderland said to be as transformative as a car factory in

However, the British Vault failed to meet its construction targets and the government canceled plans and eventually came under control earlier this month.

Epoch Times photo
Location assigned to British Bolt’s factory in Bryce, England on 17th January 2023. (PA)

“Risk of politicians making terrible economic decisions”

Mayer said: And there is the danger that politicians will make terrible economic decisions based on promises they cannot keep. We fall into the sunk cost fallacy of throwing in big bucks even after they try to prove a point and fail. ”

He said the British Bolt incident mirrored what happened in Northern Ireland in the early 1980s.

In 1982, the DeLorean Automobile Company went bankrupt after siphoning £80 million in government funds to build a factory in Northern Ireland to produce US entrepreneur John DeLorean’s futuristic sports car.

Mayer said the DeLorean is “a really passionate guy who can talk on the hind legs of a donkey” and said: I needed a success story. And politicians are pouring money into making those dreams come true. ”

But he said the result was “a total disaster”.

Epoch Times photo
A replica of the iconic once-futuristic DeLorean car from “Back to the Future” is on display at Silicon Valley Comic-Con in San Jose, Calif., March 19, 2016. (Josh Edelson/AFP/Getty Images)

Britain’s industrial history is littered with stories of manufacturers who could not compete globally but who hired so many people that it was considered politically important not to fail.

In the early 1970s, the Conservative government, led by Edward Heath, came under considerable political pressure to support the Upper Clyde Shipyards, a consortium of Glasgow shipyards.

Thirty years later, Tony Blair’s Labor government lent MG Rover millions of dollars in a desperate attempt to keep the company and its giant Longbridge factory in Birmingham alive, but ultimately lost thousands. I lost my job and collapsed.

Tony Woodley, then general secretary of the powerful TGWU union, met with Blair and then-Treasurer to get more government support for the broken down MG Rovers.

He has since retired and become a companion. Last week, Lord Woodley called on Prime Minister Rishi Sunak’s government to nationalize the company and promote the Gigafactory.

Woodley said House of Peers: “Twelve years ago, the government’s Motor Vehicle Council secured a massive £400million funding to attract battery manufacturers to the UK. It was a small change compared to

“Nationalizing British Volt is not something nostalgic. It is strategic regardless of the relatively small but very important battery production by some car companies now.

Epoch Times photo
A sign outside the MG Rover car factory in Longbridge, Birmingham, UK, April 2005. (Carl De Souza/AFP/Getty Images)

But Mayer disagreed, urging governments and private investors to cut their losses and give up on British Vault, instead investing in research and development of cutting-edge technologies.

he said: There is a social purpose behind the money because we believe that tackling climate change and providing the technology to do so is a good thing. ”

Mayer said it would be a mistake to pour public money into a flawed commercial enterprise. This is because every time the company begins to run out of funds, it begs the government and warns of unemployment.

Warning against demands from ‘depressed executives’

“What you don’t want is for your public money to be decided by sad-eyed corporate executives who can’t turn in business plans and want the government to bail them out,” he said. rice field.

Mr Woodley said last week in the House of Representatives: Without investment and strategy, the industry will not exist in 25 years. ”

Lord Callanan, Minister for Business, Energy and Industrial Strategy, said: The British Vault incident is very disappointing, but the money we have available is still on the table. We continue to do everything we can to encourage investment in ”

The UK government has said new petrol and diesel cars will be banned from 2030, and Mayer said manufacturers will have to import them to make affordable electric cars. rice field.

Epoch Times photo
Workers at the Xinwangda Electric Vehicle Battery Co. Ltd. factory, which makes lithium batteries for electric vehicles and other applications, in Nanjing, eastern China’s Jiangsu province, March 12, 2021. (STR/AFP via Getty Images)

Mayer said: On all three counts, the UK has none of them. Our comparative advantages in manufacturing tend to lie in high-value, complex systems and their financing, and the services that accompany them. ”

Mayer said: So bad news for German consumers and bad news for German businesses as a whole. because they pay for it. You can get a cheaper car, and you won’t have to spend a fortune buying domestic batteries. ”

he said: They could afford the right to own a car and would disappear. ”