SMMT: UK automotive needs government support to thrive

The UK automotive industry has called for swift government intervention to protect it from existential threats – such as protectionist trade policies and soaring energy costs – and guarantee its future prosperity. The Society of Motor Manufacturers and Traders (SMMT), which represents the industry, warned the window for implementing safeguarding policies could close as early as 2024. That year, European rules of origin – currently requiring at least 40% of the content in an electrified vehicle sold in the UK or Europe to be sourced from the region – will become 5% stricter. For battery packs this change will be more severe, with the minimum threshold for locally sourced content doubling from 30% of a pack's total value to 60%. A 10% tariff is charged for non-compliant vehicles. Avoiding that tariff is key to the profitability of the UK’s automotive industry. Of the 69,524 cars built here in October, 56,469 (81.2%) were exported. Some 54.9% of those exports were bound for the EU, highlighting the region’s importance. Yet just three battery gigafactories are scheduled to open in the UK by 2024, according to a June report by the Faraday Institute. They are the 2GWh Envision AESC plant at Nissan’s facility in Sunderland (opened in 2012), the Britishvolt project in Blyth and a second Envision AESC plant in Sunderland. Britishvolt’s problems have been widely publicised. Autocar Business recently reported it had secured funding for the "coming weeks", with its nearly 300 staff taking a voluntary pay cut for November to conserve cash. It was due to bring 25GWh of battery production online by 2030, but this looks increasingly unlikely as the project’s problems mount – with a sale to external suitors now on the cards. Sunderland’s second Envision AESC plant, due to open in 2024, will start with an annual capacity of 11GWh. This is planned to eventually scale to 38GWh. Other start-ups exist, such as West Midlands Gigafactory (WMGF), but these are emerging projects with long roads ahead. For example, WMGF only obtained early-stage council backing (not planning permission) for its 130-acre Coventry site earlier this year. The Faraday Institute report predicts that the UK will require 10 gigafactories with 20GWh outputs by 2040, for 200GWh in total. Currently, just 20% of that appears to be in the pipeline courtesy of Envision AESC’s two facilities. Exacerbating the problem of insufficient battery production in the UK is a dramatic and sustained uptick in the sale of electric vehicles, backed by the government’s policy of phasing out ICE vehicles: 22% of vehicles sold here from 2024 must be electric. Brands that don't comply are expected to face heavy fines. The outlined schedule follows with 52% of fully electric sales by 2028 and 80% by 2030 – the year when sales of new pure-petrol and diesel cars will be banned. “What we’re seeing is a slow-motion car crash, with [the Department of Business, Energy and Industrial Strategy] standing on the sidelines,” said David Bailey, professor of business economics at the Birmingham Business School, earlier this month. “On the transition to EVs, we seem to be in catch 22. We need battery production to anchor mass car assembly, but if the battery industry doesn’t think there’s going to be a mass car industry here, it won’t invest." In order to protect the industry, the SMMT argues the government needs to swiftly establish an action plan with additional investment into decarbonisation and the EV charging infrastructure, as well as extended support on energy costs. Chief executive Mike Hawes tonight told guests at the organisation's annual dinner that "if we get this wrong we are talking about a lot more than 30 years of hurt". Nonetheless, the lobby group “is not asking for support to survive”, said SMMT president (and Stellantis circular economy vice-president) Alison Jones. Jones said: “UK Automotive is an agile sector that doesn’t just embrace change and innovation, we lead it. But we face fierce global competition and in the global race to net zero we must be as attractive – more attractive – than rival countries against whom we will compete for investment. “We have inherent strengths, but to play to them, we need the right competitive framework – a level playing field. We are not asking for support to survive but demanding action so we can thrive.” The SMMT’s call to action follows last week’s news that UK car production had rebounded from a September slump, with year-on-year growth in five of the past six months. Hawes said of the news that “UK car makers are doing all they can” but that “more favourable conditions for investment are needed and needed urgently”.

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SMMT: UK automotive needs government support to thrive

Industry body says action plan is needed if UK automotive is to remain competitive on a global scale

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SMMT: UK automotive needs government support to thrive

Industry body says action plan is needed if UK automotive is to remain competitive on a global scale

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