UK could lose existing auto industry without more government support
28 July 2021
The UK risks pushing vehicle manufacturing out of the country and into mainland Europe if it does not offer more support in the switch to electrification.
This is the findings of a report published by the House of Lords cross-party science and technology select committee. The UK’s battery strategy does not align with its ambitions for a net zero future, nor does it take advantage of opportunities for the research and manufacturing sectors. The country could also fall further behind global competitors in battery manufacturing. It was also stated that the UK fails to make the most of its expertise in fuel cells.
‘The government must act now to avoid the risk of the UK not only losing its existing automotive industry but also losing the opportunity for global leadership in fuel cells and next-generation batteries. The government must develop a coherent successor to the industrial strategy and promote its objectives clearly, both domestically and internationally, supported by investments commensurate with those of the UK’s international competitors,’ the report found.
The UK government wants the country to achieve net zero by 2050. A core part of these plans is the end to sales of new petrol and diesel models by 2030 and a zero-carbon vehicle only mandate for 2035. Yet to ensure buyers make the switch, the committee also believes more needs to be done to improve charging infrastructure and promote the safety of electrically-chargeable vehicles (EVs) and hydrogen fuel-cell vehicles (FCEVs).
‘The committee found that the government’s ambition to reach net-zero emissions is not matched by its actions,’ said Lord Patel, chair of the Lords science and technology committee. ‘The government must align its actions and rhetoric to take advantage of the great opportunity presented by batteries and fuel cells for UK research and manufacturing.
The committee started its investigation into the government’s battery strategy around six months ago, calling on experts from multiple industries affected.
It found that there was still a hangover from the Brexit process, which caused years of turmoil for the automotive industry. Even now, the situation has the potential to disrupt the sector, especially with the impending 2027 deadline for a new ‘rules of origin’ mandate.
As part of the Brexit deal, carmakers based in the country must ensure that the EV battery and 55% of a vehicle’s components are manufactured in the EU or the UK. Without support, carmakers could move production into Europe to shorten supply chains for critical parts.
‘Brexit has clearly created some extra challenges, both in terms of the 2027 deadline and in finding a skilled workforce,’ said Baroness Brown of Cambridge, select committee member, told Autovista24. ‘We are seeing big companies, such as Nissan, responding to this in their announcements about battery production.
‘I think we do need the government to be supporting the growth, particularly in battery production, and recognising just the scale of which we need to be increasing our capability or capacity. If we are to retain the volume of car manufacturing and the high number of exports to the European Union that we currently have, support will be crucial. We are expressing our concern that there is not enough thinking and planning about that yet.’
While there has been a series of announcements about establishing gigafactories in the UK, the committee believes more needs to be done, and the government needs to tackle the issue sooner rather than later.
‘The committee on climate change suggested that by the 2030s, half of the UK car parc needs to be electric,’ added Baroness Brown. ‘But that suggests we may need 75 to 100 gigawatts of batteries per year, either for our exports or for the whole fleet. At the moment, we have the announcements of two battery gigafactories. Britishvolt is talking about 10 gigawatt-hours by 2023. But we are going to need perhaps seven times that every year between now and 2030. Hearing about two gigafactories is great, but we need more.’
Battery gigafactories will take time to reach the stage of manufacturing. Giving evidence to the committee, David Wong, senior innovation and technology manager, at the Society of Motor Manufacturers and Traders (SMMT), said: ‘It takes something like 30 to 42 months to get everything off the ground, including development, construction, test runs and, finally, the commissioning of a gigafactory.’
Brexit has also caused an issue in recruiting skilled workers, and carmakers’ transition to electrification means more needs to be done to train the existing workforce.
Alongside vehicle manufacturing, the UK is home to significant engine building, and the development of other key components. In addition, the servicing, maintenance and repair (SMR) sector needs to be brought up to speed on dealing with EVs.
‘One of our major concerns was that more needs to be done to ensure workers can transition from mechanical to electrical skills,’ added Baroness Brown. ‘We would like to see much more support from the government for the retraining, the upskilling, and indeed for SME industry leads to recruit specialist staff from overseas for manufacturing and research. Ensuring that the revenue visa regime will be entirely supportive of this upskilling and training of people in the UK is a high priority.’
While there are concerns about manufacturing moving overseas, the government’s plans to achieve net zero by 2050 will not come to pass if consumers do not take up the option of a zero-carbon vehicle.
However, while the number of models available has multiplied, the same cannot be said about the UK’s charging infrastructure.
‘The charging infrastructure needs to be there,’ said Baroness Brown. ‘It needs to be simple to use, so you do not need multiple cards or apps in order to make a payment. It needs to be simplified, using standard payment cards.’
There are also issues when it comes to the location and rollout of infrastructure. ‘We need to move away from the fact that currently have areas which are “charging deserts”. In areas like central Cambridge or parts of central London, there is plenty of charging. In other areas, you cannot find a charger for miles,’ added Baroness Brown. ‘So, we need a “rights to charge” mandated for everybody, so that everyone can feel confident that an EV can meet their needs.’
The committee was alarmed by the contrast and apparent disconnect between the optimism of ministers about the UK’s prospects and the concerns raised by other witnesses, who fear that the UK is lagging behind its competitors and facing significant challenges with innovation, supply chains and skills.
To this end, the report makes a number of recommendations to the government and research funders, aimed at protecting the UK’s automotive sector and developing a competitive advantage for fuel-cell and next-generation battery development.
For this, it suggests an increase in funding, allowing the country to leapfrog other areas and lead the way in next-generation technologies. By focusing purely on catching up with current methods, it could fall further behind.
Baroness Brown also stated that while the UK has the Faraday Institution for research and development of batteries, there is no equivalent for fuel cells, which could play an essential role in decarbonising transport.
Alongside further recommendations for skilled workers and manufacturing support, the committee also suggests an urgent acceleration of the expansion of the public-charging network. This needs to deliver 325,000 charging points by 2032, including rapid chargers in towns and across the strategic road network.