Automotive sector leaders have challenged the UK’s main political parties to provide the conditions which ensure the key industry is able to survive in the transition to electric vehicles.
Representatives from the car manufacturing industry – which plays a key role in the North East economy – are meeting this week at the Society of Motor Manufacturer and Traders (SMMT)’s international summit, where a five-point plan for the future of the industry has been published.
Concerns for the future of the automotive sector have been raised in recent months, with repeated setbacks to the Britishvolt scheme in Northumberland highlighting the difficulty of building the battery gigafactories needed to supply car makers. There are also fears that post-Brexit trade rules affecting electric vehicles could lead to UK plants closing down.
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But the SMMT said the automotive sector could be worth £106bn between now and the end of the next parliament if companies are given support to switch to production of electric vehicles. Its five-point plan – Manifesto 2030: Automotive growth for a zero emission future – outlines the help it says companies need from the Government, including access to clean energy, support for training workers, improving the UK’s vehicle charging network and creating a Green Automotive Transformation Strategy.
Mike Hawes, SMMT chief executive, said: “The Government has set the industry tough targets and we are committed to meeting them. But we are in the middle of the most fiercely competitive investment landscape of a generation and need a UK response, urgently, using every policy, every fiscal and regulatory lever, to make Britain the most attractive place to invest.
“The automotive industry rises to every challenge, so we set out today a challenge to all political parties: back us with the right conditions and we will turn our obligations into opportunities for our industry, for jobs, for the environment and for the UK.”
The strategy has been published when major concerns have been raised by some of the UK’s largest car manufacturers over rules of origin due to come into force at the start of next year, which will lead to tariffs on exports of UK-built cars, particularly electric models. Tariffs of 10% are due to be imposed on exports of electric cars between the UK and the EU from next year if at least 45% of their value does not originate in the UK or EU, with Vauxhall owner Stellantis saying it could mean it would have to close its UK factories.
Car manufacturers are also being hit by inflationary pressures, with more than 80% of companies responding to SMMT’s latest
automotive business confidence barometer reporting rising input costs, which are limiting profitability and acting as a brake on investment. The North East has a thriving automotive sector, with the Nissan plant in Sunderland employing more than 6,000 people and thousands more being employed in its supply chain. Nissan has been at the forefront of the switch to electric vehicles and its own battery supply is guaranteed through the expansion of the Envision AESC plant next to the Sunderland factory.
But the problems surrounding the Britishvolt project – with the original company going bust and question marks being raised over its
new owner – have highlighted the major challenges in the EV transition.
