CEO Update

UK Automotive needs an aerodynamic approach amid election headwinds

12 January 2024 #CEO Update

Last year’s £20 billion investment in UK Automotive’s net zero transition, from Cowley and Coventry to Ellesmere Port and Sunderland, helped reset the narrative for global automotive investment in Britain – and our collective mission in 2024 is to ensure these commitments generate just returns. With markets around the world moving away from internal combustion engines to batteries and fuel cells; as connectivity and automation transform mobility, the UK must build on its reputation as one of the best locations to develop, produce and sell these latest vehicles, components and solutions.

We already make nearly every component required for EV production and have strong markets for cutting-edge vehicles of all kinds. The priority now is to ramp up volumes. Good progress last year saw the electric car and van markets grow by a fifth, and electrified vehicle production up by more than half. Harnessing that momentum is crucial – particularly as we enter a pivotal election year in Britain and globally.

The end of 2023 gave us a degree of certainty with a hard-won extension to UK-EU rules of origin for EVs and batteries finally agreed – but given the major infrastructure projects required to increase battery production by 2027, there is not a moment to waste. Similarly, with Britain’s new EV sales targets now in force amid flattening consumer demand, time is short to create the conditions for mass uptake. Owning an EV must be an option for all buyers, yet barriers remain.

2024 must be remembered as the year those barriers were removed. That’s why we’re calling on the Chancellor to use his forthcoming Budget to halve VAT on new zero emission vehicles, which, combined with mission-critical investment in public charging infrastructure, would give drivers confidence to go electric. It would also send a powerful message: the time to switch is now.

If Britain is to be at the forefront of the global transition as other countries also make huge investments in their sectors, all political parties must double down on their support for the motorist, and for the industry. No other sector is so integral to the net zero success, jobs and economic growth across the UK that every government craves.

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