Johnson Matthey, the British chemicals and sustainable technologies firm, has pulled out of battery development.

The firm, which makes catalytic convertors for cars, has a base in Swindon which makes fuel cells.

It says competitors are too far ahead to justify further investment and is selling its battery division.

Commentators are saying the timing of the announcement will be an embarrassment to the Government as it hosts the Cop26 conference in Glasgow because it leaves Britain without a home developer, in a field dominated by China, South Korea and Germany.

Johnson Matthey has been working to commercialise its range of high nickel cathode materials, principally for the automotive industry.

But it has now concluded that the potential returns from its battery materials business 'will not be adequate to justify further investment'.

Demand for battery materials is accelerating, but so too is competition from alternative technologies and other manufacturers.

The firm's board has therefore decided to pursue the sale of all or parts of this business with the ultimate intention of exiting.

JM says it is making good progress in other areas, such as in hydrogen technologies and the decarbonisation of the chemicals chain.

Robert MacLeod, chief executive, said: "While the testing of our eLNO battery materials with customers is going well, the marketplace is rapidly evolving with increasing commoditisation and lower returns. We have concluded that we will not achieve the returns necessary to justify further investment."

Johnson Matthey also stated that the trading outlook for the full year ending 31st March 2022 is towards the lower end of market expectations.

This was primarily due to the 'wide-spread supply chain shortages affecting the automotive industry and the consequential impact on precious metals prices, together with acute labour shortages in the United States that are adversely impacting its Health business.