UK Auto Industry Needs More Support for Electric Transition

Just over a week ago, UK PM Rishi Sunak put back the date for the UK transition to new EV only sales from 2030 to 2035. He insisted that the move was in line with most of the UK’s main competitors, and that moving the date back would lessen any economic harm from the move – levelling the playing field. However, many vehicle manufacturer who had spent large sums of money preparing for the phase out of new EVs were angered by the date change and made their feelings known.

The change of date also endangers the UK’s vehicle industry, which had started revitalising itself after some bad times over the past few decades. This change strikes another blow to the industry after Brexit. The ramifications of Brexit are still felt in the industry, with the UK and EU still trying to find a solution to how much of a vehicle should be classified as of UK or EU origin to avoid tariffs on vehicles that the UK exports to the EU. The industry is vital to the UK economy, and employs almost 1 million people, with many highly skilled jobs, and often located in economically deprived locations.

Now, the Institution of Mechanical Engineers (IMechE) has released a report asking the government to assist the automotive industry with more support to create a level playing field. The report, entitled “UK Automotive Sector: Surviving the Net Zero Transition” claims that in order for the UK vehicle industry to survive, the government must provide incentives for consumers to buy electric vehicles, as well as greater support to vehicle manufacturers, according to a new report from the Institution of Mechanical Engineers.

Terry Spall, Past President of the Institution and co-author of the report, said, “Though activity levels have been increasing, the UK is behind the curve as it progresses its transition to a zero emission fleet and Net Zero goals. Many significant hurdles have yet to be effectively addressed and the UK’s future competitive position as a global vehicle manufacturing nation is at stake. It is not too late to save the industry and this report presents a plan to do so. Targeted strategic interventions will allow one of the UK’s globally iconic industries to survive and thrive in a future where road transport must transform to be smarter and completely decarbonised.”

Many companies that invested money in the infrastructure to support the transition are now reconsidering their positions. The report says that the Government should consider underwriting the investment risk of charge point providers. Other recommendations include having mandated targets set by Westminster to boost the number of electric vehicle charging points, with programmes to measure what works at local level.

As for manufacturing, support needs to increase to create a level playing field, otherwise the UK risks importing most EVs currently made here, with many coming from new market entrants such as China. Part of this support is creating the right conditions for volume battery production in the UK, including enabling funding, supply chain development, securing and processing of critical minerals. This should include incentivising local clusters around each factory to develop supply chains for other key parts of electric vehicles, not just batteries.

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