CEO Update

How investment is resetting the UK auto manufacturing narrative

08 September 2023 #CEO Update

As temperatures soared across the UK this week, the automotive industry enjoyed its own heatwave. The end of the summer recess saw a flurry of good news: the UK re-joining the EU’s scientific research scheme, Horizon; government funding allocations for battery and CAM supply chain development; and the opening of the UK’s biggest EV charging hub in Birmingham.

But the most highly anticipated event was yesterday’s landmark start of production at Britain’s first ever dedicated electric vehicle factory. The transformation of Stellantis’ sixty-one-year-old Ellesmere Port plant is a major boost for the UK’s manufacturing base, skills, jobs and trade and, following Tata’s decision to build its first battery gigafactory in the UK, resets the industry’s narrative as a global EV manufacturing player. Now we need government to seize this momentum with a strategy to shore up our competitiveness and promote the UK’s clear strengths overseas.

There was further good news for the van sector on Tuesday, as we announced the UK market’s eighth month of growth in August, with electric van demand up by almost a fifth. The new car market, meanwhile, entered its second year of growth – powered again by robust demand for EVs. Zero emission cars accounted for one in five registrations – a record for August.

It’s an impressive recovery for both markets, however, we’re not there yet. If we’re to deliver on decarbonisation targets, accelerating EV uptake at pace is now imperative. On 1 January 2024, the industry faces the double whammy of a Zero Emission Vehicle Mandate – for which there is still no regulation published – and potential tariffs on batteries and EVs if a solution cannot be agreed to delay new rules of origin thresholds.

Given the huge ramifications for manufacturing and markets on both sides of the Channel, we remain hopeful that pragmatism will prevail but also that the UK government urgently provides clarity on the Mandate. With less than four months to go, businesses can only proceed with the clarity of regulation not the uncertainty of consultation.

I was able to make these points at Wednesday’s House of Lords Environment and Climate Change Committee evidence session as part of its inquiry into the EV transition. The inquiry focuses on the transition from the motorist’s perspective, but it was also important to underline the industry’s unwavering commitment, backed by extraordinary investment, to deliver net zero mobility.

With the date for the Autumn statement also announced this week, we look to the Chancellor to use his 22 November moment to announce that government will pull every lever – fiscal and otherwise – to ensure the industry’s long-term competitiveness and drive sustainable, green mobility for the UK.

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