With countries around the world accelerating their efforts to attract international investment in advanced manufacturing, Britain’s automotive sector has called on all political parties to back the UK by committing to five key pledges as part of a dedicated industrial strategy.
The Society of Motor Manufacturers and Traders (SMMT) launched “Manifesto 2030: Automotive growth for a zero emission future” to an international audience of industry, government and media at its annual International Automotive Summit on 27 June – underlining that while the UK is in a strong position to achieve its ambitious net zero targets, more needs to be done to deliver investment in green infrastructure, renewable energy, an upskilled workforce, regulatory competitiveness and boost to global trade.
SMMT called on every political party to recognise the strategic importance of the sector to the UK and create the conditions for a 10-fold rise in annual battery electric vehicle (BEV) production to more than 750,000 units per year by 2030.
This would equate to a cumulative £106 billion worth of products and give confidence for all drivers to go electric.
The manifesto, on behalf of the UK automotive industry, calls on all political parties to commit to the following five pledges and policy actions:
- A Green Automotive Transformation Strategy for a stronger economy
Publish a Green Automotive Transformation Strategy that supercharges UK Automotive to achieve net zero. A strategy which enables innovation, attracts investment and secures manufacturing of clean technologies in the UK to deliver economic growth and zero emission mobility.
- Net zero mobility for everyone
Foster a reliable and affordable UK-wide recharging and refuelling network through binding targets complemented by a motor tax and regulatory system that ensures no one is left behind in the transition to net zero.
- Green skills for a greener future
Offer the skills workers want, by creating a one-stop-shop national upskilling platform, and develop the future talent that business needs, combined with greater STEM education in schools and a dynamic immigration system that attracts global talent.
- Made in Britain – Made for the world
Position automotive and advanced manufacturing supply chains at the core of UK trade policy and market access. Secure access to global markets for tariff-free export of British-made vehicles, batteries and green technologies, and deliver export support services that allow businesses of all sizes to succeed.
- Powering the UK clean tech revolution
Ensure net zero-critical industries such as automotive are able to access affordable and internationally cost-competitive zero emission energy to power the clean tech revolution. Dedicated energy and investment measures should be available to make zero emission vehicle production and use a reality.
Kemi Badenoch, Secretary of State for Business and Trade, told the conference that a successful UK economy relies on a successful automotive industry but that the Government would think things through before publishing detailed policies soon on how it would support the industry.
She said: “We are not going to copy and paste what is happening in another country and transport it here. We have to do what is right for our own economy. We have to do what’s going to work well.”
Meanwhile, Shadow Secretary of State for Transport, Louise Haigh, said in her speech to the hall that Labour will act to secure the automotive jobs of the future by investing £2bn in eight gigafactories and setting binding targets to boost the charging rollout.
She said: “We will make the UK a clean-energy superpower by 2030, lowering costs hampering industry.”
The conference heard how the growth of the UK automotive industry is contingent on British plants attracting the next generation of electric models and scaling up an emerging EV supply chain.
As the sector consolidates its post-pandemic recovery, with sustained growth in new vehicle registrations, production output and manufacturing jobs – up 4% to a total of 208,000 jobs in the last year – it faces fierce global competition as other countries offer huge cash incentives and subsidies to attract green manufacturing.
Chris Allen, Managing Director at LEVC, said: “We have lots of manufacturers with hundreds of years of history, specialisms and skills. We’re trying to reform an ecosystem that grew organically over 100 years, in just 15 years.”
According to Chris Gall, Engineering Director at Alexander Dennis, the UK bus industry continues to lead the way on electrification with its FCEV and BEV products having a crucial role in helping meet decarbonisation targets.
He added: “Since 2016 we’ve delivered more than 2,000 electric buses and are about to clock our millionth EV mile.
“Also, through the CAVForth trial in Scotland, we are seeing the benefits autonomous vehicles can bring and that they can provide a low-cost alternative to trams.
“However, we need a national charging infrastructure policy that allows the operators to electrify their depots in a timely manner and simplifies the process. It’s complex, requires the approval authority and can take several years to complete.”
Meanwhile, Simon Villanueva, Director of Legal and Public Affairs at Volvo Trucks, said the company predicts that future production of zero emission heavy goods vehicles will depend on a broad range of solutions, not just electric, but suitable business conditions are key to delivering innovation.
“As long as we avoid recession, the truck industry will be okay, but a recession that makes us suffer could risk holding back decarbonisation”, he added.
One of the panel sessions at the conference discussed how the threat of tariffs from tougher local content rules under the UK-EU Trade and Cooperation Agreement, signed in 2020, and which come into force in six months’ time, would further disadvantage the industry.
If not addressed, it would make British-built electric vehicles less competitive in the UK’s biggest export market, while pushing up EV prices for British buyers – just as the UK and EU look to accelerate their uptake.
Ford has invested heavily in electric vehicles across Europe, with £380 million to be spent on growing e-motor capacity at Halewood in Merseyside. It is calling for current trade requirements to be extended to 2027, allowing time for the battery supply chain to develop in Europe and to meet EV demand.
Tim Slatter, Chair, Ford of Britain and Ireland, told the conference: “I think there can be an agreement on rules of origin but it is vital that friction at the border is reduced.”
In the SMMT’s May 2023 automotive business confidence barometer, more than 80% of companies responding reported rising input costs, which are limiting profitability and acting as a brake on investment, despite an increase in orders and output.
Furthermore, competitive energy prices are critical to long-term domestic EV production, with more than nine-in-10 firms citing the importance of energy price mitigation measures as essential to further investment.
The UK automotive sector faces electricity costs more than double those of EU rivals, with the added challenge of long lead times to secure essential new grid connections for renewable investments.
Other measures seen as important by industry include improved trade support, regulatory certainty and, above all, a healthy EV market – for which lower energy costs, mandated charging infrastructure targets, and financial incentives for buyers, were ranked as the biggest drivers.
Speaking at the conference, Mike Hawes, SMMT Chief Executive, said: “The government has set the industry tough targets and we are committed to meeting them. But we are in the middle of the most fiercely competitive investment landscape of a generation and need a UK response, urgently, using every policy, every fiscal and regulatory lever, to make Britain the most attractive place to invest.
“The automotive industry rises to every challenge, so we set out today a challenge to all political parties: back us with the right conditions and we will turn our obligations into opportunities for our industry, for jobs, for the environment and for the UK.”
Yet amid the challenges the fundamental strengths of the UK automotive sector remain – a diverse supply chain spread nationwide, a flexible, highly skilled and productive workforce, iconic brands, and world-renowned R&D capabilities with unrivalled collaboration between academia and industry.
With the right conditions and backing, this workforce can drive wholesale industrial transformation with a decade of benefits for wider society.
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