CEO Update

To safeguard UK automotive manufacturing tomorrow we must invest in battery technology today

17 May 2019 #CEO Update

Good news this week came in the form of fresh government funding worth £28 million to support the development of battery technology at the new Coventry Battery Industrialisation Centre, targeted as a centre of excellence, creating highly skilled jobs and delivering practical training to workers. The investment is part of the government’s Industrial Strategy’s Challenge Fund and comes on top of an £80 million initial investment in the centre.

However, welcome as this investment is, it pales in comparison to commitments already made in other nations such as China, the US and Germany. With propulsion systems representing up to 50% of the value of a vehicle, there is a considerable prize for the UK, if it is able to position itself at the forefront of developing the next generation of low carbon, including electric, powertrains.

Indeed, with the shift to vehicle electrification well underway globally, there is a requirement for significant battery manufacturing capacity to support future electric vehicle (EV) production. Brexit notwithstanding, a forecast for EV production in the UK alone provides enough demand for approximately eight battery giga-factories by 2040.

For the UK to maintain its position as an automotive manufacturing powerhouse, and become a global leader in zero emission technologies, we need the right conditions to encourage manufacturers to invest here.

Initiatives such as the new West Midlands Local Industrial Strategy will certainly help and we look forward to engaging on the detail to ensure local policies in this automotive heartland align with national objectives, and that world-class ambitions for the industry are matched by a world-class package of support for the market. This will be essential if we are to deliver on shared air quality and climate change goals.

Figures published by SMMT on Wednesday show that used car sales are holding steady, with transactions down less than 1.0% in the first quarter and a 30.7% growth in demand for hybrid, plug-in hybrid and pure electric cars.

Amid ongoing political and economic uncertainty, this is good news for the industry and consumers. However, alternatively fuelled vehicles still only make up a tiny fraction of cars changing hands, both in the new and used markets, and we need to get more of them onto the road. A long-term government commitment to supporting take up of the latest, cleanest technologies in the new car market is therefore absolutely vital.