CEO Update

Collaboration key for second electrified decade

25 March 2022 #CEO Update

A massively busy week but, after what has been a difficult few years, it was fantastic to return to a fully in-person event with SMMT’s sellout Electrified 2022. With over 400 people from a diverse range of sectors across the industry, there was a real buzz with collaborative debate on how to push the electrified agenda forward.

Over the past 10 years, the UK automotive industry has set out its intent – to meet the challenge of net zero, investing massively with more than 150 plug-in models now available, up from just six in 2011. Registrations are also soaring from one in 1,750 to one in six in the same period, so it is clear to see the sector’s success.

As we enter our second electric decade, however, the stakes are higher, with some of the world’s toughest regulation coming, including the phasing out the sale of new ICE cars and vans by 2030, and hybrids in 2035, HGVs by 2040 and a zero emissions vehicle mandate due imminently. This regulation will seek to determine the pace of change in a market constantly buffeted by headwinds, including the Covid-19 pandemic and soaring production costs.

Mandates on manufacturers alone will not drive the transition. Businesses need competitiveness –  on energy, investment and skills. Time is of the essence as the industry is not yet in recovery, but costs are increasing rapidly. This week’s Spring Statement was something of a missed opportunity for the Chancellor to help automotive manufacturers with nothing to address rising business energy costs.

Delivering net zero needs a competitive industry and a competitive market. We need a universal right to charge electric vehicles, for all drivers. The EV infrastructure strategy released today points in the right direction, addressing problems with the current customer charging experience and setting out a nationally co-ordinated, locally delivered plan which aims to ‘build ahead of need’. The UK already has an enviable and ever-growing rapid charging network so focus must be given to expanding public on-street and destination charging provision – and not just for cars but for all road transport.

Every stakeholder will have to play their part in this transition but, if industry and consumers are to have the certainty they need to invest, commensurate and binding targets must be set for infrastructure provision. Deployed nationally and at pace, this expansion would give drivers confidence they will be able to charge as easily as they would refuel, wherever they are.

Elsewhere this week, automotive manufacturing output in the UK continued to face the most extreme operating conditions as global economic headwinds continue to drive up costs and constrain supply. The sector entered 2022 hopeful for recovery but, with car production declining -31.7% and engines by -30.9% in February, it’s clear that recovery has not yet begun. Commercial vehicle output did provide a glimmer of hope, up 92.2% year on year, but the sector isn’t out of the woods yet.

Finally, I would like to thank everyone that supported SMMT Electrified, especially  the manufacturers who provided vehicles, staff, event partners Auto Trader, E.ON, PA Consulting, Pinsent Masons, RAC, Shakespeare Martineau and our international partners, Germany Trade & Invest, Hungarian Investment Promotion Agency (HIPA), Illinois Department of Commerce and Economic Opportunity and Investment Office of the Presidency of the Republic of Türkiye. The feedback has been extremely positive and the event timely with today’s Government announcement.

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