EY faces criticism on dual-role at Britishvolt

10 February 2023 Consultancy.uk 3 min. read
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Australian company Recharge Industries has sealed a deal to buy Britishvolt out of administration. Administrators EY have come under fire for their role in the deal, however, having reportedly previously been a close advisor of the beleaguered start-up, and reportedly charging “millions of pounds in fees” while its finances deteriorated.

With interest in electronic vehicles (EVs) growing rapidly, so too is the need to supply the batteries powering them. While e-cars accounted for just 4% of global car sales last year, by 2030, this is projected to rise to over 30%. It may further accelerate after this, as the number of countries banning the sale of new combustion-engine-powered transport grows.

These trends saw Britishvolt launched in 2019. The UK start-up manufacturer of lithium-ion batteries for the automotive industry had commenced construction of a gigafactory in North-East England in 2021. The company had hoped to produce 300,000 electric vehicle batteries a year on the site, while employing about 3,000 staff – but work was halted in August 2022 amid funding difficulties.

EY faces criticism on dual-role at Britishvolt

Having been championed by former Prime Minister Boris Johnson to help drive a greener economy, Britishvolt received the promise of government financial support and funding by metals giant Glencore and British luxury car firm Aston Martin. Even so, the firm failed to adequately finance the multi-billion-pound facility in Blyth.

The company went into administration in January 2023, with a majority of the 300 Britishvolt staff losing their jobs in the collapse. In the weeks since, however, administrators from EY have been working to find a way of reviving the project – and the firm has now announced it has entered into an agreement for Britishvolt’s assets.

Following “a process conducted by EY that involved the consideration of multiple approaches from interested parties and numerous offers received,” an EY statement confirmed that Australian company Recharge, and its US parent company Scale Facilitation Partners were now preferred bidders. Recharge is in the process also of establishing a large-scale lithium-ion battery cell production and research capability in Australia.

Commenting on the news, David Collard, CEO of Recharge Industries, said, “We’re confident our proposal will deliver a strong outcome for all involved. Using world leading artificial intelligence and multinational research partnerships, we are finding ways to make batteries better, safer, and longer lasting.”

Conflicts of interest

EY has come under fire for its involvement in the process, however. According to reports from the Financial Times, the Big Four consultancy was a longstanding advisor to Britishvolt – playing a central role in devising its failed strategy, seconding a team to the company for almost two years, and collecting “millions of pounds in fees” in the process.

While it is not unusual for advisors to be appointed for administrations, EY’s involvement has raised eyebrows among Britishvolt’s former staff. Sources close to the story told the Financial Times that several Britishvolt employees questioned the validity of EY’s twin responsibilities, during a “heated video call” between staff and the administrators in January.

An industry insider meanwhile told the newspaper that they believed the appointment “must be a conflict of interest”. EY insiders seemed less concerned, however, with one simply telling the Financial Times, “You have to laugh” at the firm’s dual duties.