Collapsed UK battery startup Britishvolt is expected to be bought out of administration within the next week with an Australian firm at the helm.

EY has said the deal for Britishvolt’s assets is set to close within a weekri

Recharge Industries, which is owned by New York fund Scale Facilitation Partners, has been named as the preferred bidder in a sale for the majority of the business and assets of Britishvolt.

Administrator EY has said the deal is set to close within a week.

Recharge is currently working to develop one of the world’s largest gigafactories, located in Victoria in Australia.

David A Collard, founder of Recharge Industries and chief executive of Scale Facilitation, said: “We’re thrilled to be progressing with our proposed bid for Britishvolt and can’t wait to get started making a reality of our plans to build the UK’s first gigafactory. After a competitive and rigorous process, we’re confident our proposal will deliver a strong outcome for all involved.”

According to reports, Recharge Industries has beaten three other offers to become the preferred bidder.

EY said the process had “involved the consideration of multiple approaches from interested parties and numerous offers received”.

Parties interested in acquiring Britishvolt are believed to have included Jaguar Land Rover owner Tata.

Britishvolt had been working to launch a gigafactory at Blyth in Northumberland, helping to ensure a future for battery production in the UK.

The work would have supported government plans to make the UK automotive industry a leader in electric vehicles, while also creating 3,000 jobs and a further 5,000+ indirect roles in the wider UK supply chain.

But while the startup secured £1.7bn funding from UK asset investment giant Abrdn and fund manager Tritax in January 2022 on the back of a government pledge of £100m for the project, it had been forced to delay plans due to “difficult external economic headwinds including rampant inflation and rising interest rates”.

It averted collapse in November 2022 after securing short-term funding but rescue talks in January failed and the company called in administrators.

Its demise has been a blow to the Government’s “levelling up” agenda but it’s also led to awkward questions about the UK’s inability to offer funding packages such as seen in the EU and US. Electric commercial vehicle startup Arrival recently confirmed plans to shift its focus away from its UK operations and prioritise its resources on the development of its US van product, supported by incentives from the US government.

Britishvolt’s collapse had also led to further concerns about the future for the UK’s auto sector in the run up to the 2030 ICE ban.

The only current UK battery facility lies next door to Nissan’s Sunderland plant, owned by Japan’s Envision AESC and providing localised battery production for the Leaf, with plans to expand for the Leaf’s successor.

The Faraday Institution, a research group focused on battery science and technology, has said the UK will need to have a total of five gigafactories by 2030 and 10 by 2040, while the Society of Motor Manufacturers and Traders (SMMT) has previously said that bold action is needed on domestic battery production to secure the industry’s future.