Currently reading: Jobs threat as energy prices soar for UK manufacturers
SMMT calls for Government help as “spiralling” energy costs are on average 59% more than European rivals pay

Calls for urgent government action have been made to stop the “spiralling” cost of energy within the automotive manufacturing sector, suggesting thousands of jobs could be cut.

The Society of Motor Manufacturers and Traders (SMMT) said costs within the sector have risen by almost 50% this year alone - an uplift of £90 million. This is equivalent to 2500 jobs.

This, its data shows, is made worse when compared with energy prices across the rest of Europe, the UK paying on average 59% more.

The cost of energy has shot up due to less supply and more demand on the global wholesale market. This has been caused somewhat by Russia slowing its flow of gas to Europe in retaliation to imposed sanctions following its invasion of Ukraine.

The SMMT adds that these rising costs – and a lack of taxpayer help – is “putting UK manufacturers at a competitive disadvantage” and “stalling momentum” at a time when massive investments are needed to meet zero-emissions targets.

Speaking today at the automotive industry’s annual summit, SMMT chief executive Mike Hawes said: “From Covid impacts to component shortages, supply-chain disruption to trade uncertainty and regulatory change to rising inflation, the challenges facing this sector are immense. 

“Nevertheless, addressing the UK’s high energy costs is the industry’s number-one ask. Help with energy costs now will help keep us competitive and be a windfall for the sector, stimulating investment in innovation, R&D, training – all reinvested in the UK economy.

"With the right backing, this sector can drive the transition to net-zero, supporting jobs and growth across the UK and exports across the globe.”

The calls also comes as the SMMT launches its From Full Throttle to Full Charge campaign, ahead of the ban of new petrol and diesel vehicle sales by 2030.

“The urgency of action required is self-evident”, the SMMT said.

Its report, released as part of the campaign, suggests that 123,500 jobs are at stake as part of the transition from ICE to EV production. This is due to many manufacturers of ICE components, such as engines and exhausts, no longer being required, so their transition to electrification presents major challenges. 

The SMMT adds that many firms risk being left behind as the jobs and skills may not be transferable to EV production, leaving around 22,000 jobs at risk.

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“Our plan, From Full Throttle to Full Charge, sets out how industry can work with government to build a UK automotive ecosystem fit for a zero emission future,” Hawes added.

“If there is the will, the effort and the action from government, they will find it matched by that of the UK industry in investment and competitiveness.”

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