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At the turn of the last century, the pioneer of the modern British motor industry, William Morris, was just starting out in business.
Originally an Oxford cycle manufacturer, in 1904, the young Morris had been forced into bankruptcy by his business partner. He later repaid the creditors the money they were owed with interest – though under no legal obligation to do so. This honourable behaviour impressed Arthur Gillett, an Oxford banker who merged his private bank into the Barclays group in 1919.
Gillett later told the story of how he came to lend Morris the money to help finance the production of his first 250 cars:
He came with a scheme of his to assemble first class parts of a small car and he was going to do the assembling. The money position came into it because I asked Morris what money he had got and he replied that Lord Macclesfield had lent him £4,000.
I said to him, “But how much have you got?” and he said “1 shilling”. I then said, “Well, I will lend you another £4,000,” and he looked in utter astonishment and said, “Do you mean that?” and I replied, “My dear fellow, this thing you have told me about has got a fortune behind it.”
Thus, in 1912, when Morris began manufacturing automobiles in Cowley, Gillett offered his astonished client a larger loan than he had asked for.
In 1920, Gillett – by then a Barclays local director – persuaded the head office to offer Morris larger overdraft facilities, enabling a move to mass production and giving him a head start over Austin.
Morris Motors was soon so profitable that it hardly used the Barclays overdraft, as Morris modified the new technology pioneered in the US by Henry Ford for his assembly lines at Cowley and became one of Barclays’ largest depositors.
He increased his production from 1,932 cars in 1920 to 63,522 (a third of UK production) by 1929. The economies of scale enabled him to reduce the price of his basic model from £525 (the Morris Cowley) to £125 (the Morris Minor) per car.
Morris brought affordable motoring to the middle classes and became one of Britain’s foremost philanthropists, donating to Oxford University and medical charities.
A century later, Barclays is still supporting emerging technology in the motoring industry. The dream of affordable motoring for all realised, the founder of Pod Point – Erik Fairbairn – has a different dream, a silent one. The dream of electric vehicles.
“Most people thought that we were completely nuts,” explains Fairbairn. “Why on earth would I get rid of my internal combustion engine vehicle for an electric one? I just genuinely believed in it, and when you believe in something you know, that can take you a long way.
“Travel shouldn't damage the earth and Pod Point was my vehicle to create that vision. The amount of charging infrastructure we've got to build to enable a mass adoption of electric vehicles is immense. It’s simultaneously frightening and the most inspiring part of what we do.”
Pod Point is the UK’s leading provider of electric vehicle charging, and the company has banked with Barclays since it was founded in 2009. Pod Point’s growth has been supported by our venture debt offering, which is partly guaranteed by the European Investment Fund1.
Relationship Director, Dominic McCarthy explains: “Venture debt is a fairly innovative solution in the bank market, it allows companies like Pod Point that are disruptive and fast growing access to bank debt at an earlier stage than might otherwise be available.
So fast growing companies like Pod Point historically would have found it difficult to access finance because they are loss-making, because they are investing a lot of money in research and development, new technology and marketing.”
Today there are around 132,000 electric vehicles on the road in the UK – in the last year alone Barclays directly financed over 1,000 of them to corporate clients. The National Grid, however, predicts that the number of electric vehicles could reach 9 million by 2030.
The next decade therefore could see the biggest transformation in the way we use our roads since the 1920s when William Morris helped lead the automotive revolution.
1 The loan was supported by the InnovFin SME Guarantee Facility, with the financial backing of the European Union under Horizon 2020 Financial Instruments.
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