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MPs have launched an investigation after electric battery maker Britishvolt, hailed as a pioneering company by Boris Johnson, collapsed into administration with the loss of 300 jobs.
The Business, Energy and Industrial Strategy Committee said it will investigate the supply of batteries for UK electric vehicle manufacturing and the viability of British production.
The company, which had planned to build a gigafactory in Northumberland, hired administrators from EY after failing to secure enough money for its research and development site at Cambois, near Blyth.
Administrators said they are considering options that could include the sale of certain assets and intellectual property.
Recent turmoil in the UK electric vehicle sector also saw BMW halt production of the electric Mini at its Oxford site in October.
Darren Jones, chairman of the committee, said: “The future of car manufacturing in the UK depends on our ability to manufacture electric vehicles and being able to export them to the EU.
“This means we need local supplies of electric vehicle batteries, something we are lagging far behind compared to other parts of the world.
“This research will examine what is holding back the development of electric car batteries in the UK and what needs to be done to protect the thousands of jobs across the country in this important sector.”
Last January, then-prime minister Johnson praised Britishvolt as a “pioneer in EV batteries” and said it planned to create “thousands of jobs”.
The company received tens of millions of pounds of financial backing from metals giant Glencore.
But he collapsed in emergency funding talks in November after revealing he was on the verge of going into administration and managed to secure funding to keep it afloat in the short term.
The company had previously been promised government funding, but it was conditional on them meeting certain targets, so no money had been paid.
Ian Levy, Tory MP for the Red Wall seat of Blyth Valley, said he would continue to call on the Government to support the Northumberland Britishvolt site.
He said: “Our area needs this investment and the jobs it will bring, and I will call on the government to maintain the offer of financial support from the Automotive Transformation Fund for any consortium able to put together a comprehensive package.”
The Unite union said the government was guilty of a “total abdication of leadership” over the electric vehicle battery manufacturing sector.
National Automotive Officer Steve Bush said: “This is a sad day for the North East. The complete lack of a competent industrial strategy by the Government to protect jobs in the sector of UK motoring is becoming potentially more catastrophic by the day.”
Tim Speed, partner and restructuring expert at law firm Shakespeare Martineau, said: “As the government looks to phase out petrol and diesel vehicles by 2030, the UK EV industry has a real opportunity to to settle but this has to happen now to avoid it the UK is behind other countries.
“With the high start-up and running costs involved, Britishvolt’s administration illustrates how critical government support will be for any company looking to get into this field and, crucially, be sustainable.”