UK car industry ‘could lose 90,000 jobs without new battery gigafactories’

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Up to 90,000 jobs could be lost in UK car manufacturing unless the government increases support for electric car production to German and US levels, the industry body has said.

Industry leaders accused the government of being long on words but short on action to help the UK build capacity for electric vehicles, to support the industry and reach climate emergency targets.

Not only were more incentives needed for multinationals to build electric battery factories in the UK, but grants for consumers to purchase vehicles, and at least 2.3m charging points nationwide before the end of the decade, according to a new industry report.

“We are still falling behind the competition, so we must build back better than our competitors, match the words with deeds,” Mike Hawes, the chief executive of the Society of Motor Manufacturers and Traders, told the industry’s annual summit.

He said the UK was home to one of the biggest car and commercial vehicle manufacturing bases in the world but support on the supply and consumer demand sides failed to match that in Europe and the US.

Nissan is expected to unveil plans for the country’s first “gigafactory” next to its Sunderland plant but the industry needs many more, the report says.

Even if the UK delivers on its targets for electric engines it would have about 12 gigawatt hours (GWh) worth of lithium battery capacity by 2025, compared with an expected 91GWh in the US and 164GWh in Germany.

Manufacturers warned that the lack of UK gigafactories was holding the auto sector back.

“Every day that goes by where we don’t invest in battery-making capability we’re losing our competitiveness. We’ve got to commit at some point to at least one gigafactory,” Michael Straughan, the chief operating officer of Aston Martin Lagonda, told the industry summit.

He said two sites had been identified, in Blyth and Coventry, and “one needs to get off the mark quickly”.

“If we don’t get off the fence we are going to get left behind,” Straughan added. “The message is very clear: we will be electrified, but without batteries we don’t have an industry.”

That view was shared by Joerg Hofmann, the chief executive of the hybrid-electric black cab maker London Electric Vehicle Company (LEVC).

“We have to get away from the dependency that we have at the moment on Asian suppliers,” Hofmann said.

In addition, more stimulus was needed to encourage the public to buy electric cars with the UK offering grants of up to GBP2,500 compared with $7,000 in the US and EUR9,000 in Germany, Hawes said.

“If ambitious words were currency, the UK could indeed be rich. The lack of investment suggests a lack of commitment,” he said.

The industry’s blueprint is outlined in a new report, Full Throttle: Driving UK Automotive Competitiveness.

It says the government is already working with industry to attract additional electric battery manufacturing to the UK but calls for a “binding target” of 60GWh of battery capacity by 2030 to enable it to deliver its promise to “level up” across the country.

The shift to electric cars and electric or hydrogen-fuelled commercial vehicles is an urgent challenge as the sale of new cars powered only by petrol and diesel is due to be outlawed by 2030 in the UK, while hybrids will be phased out by 2025.

A lack of investment would most affect constituencies the Tories switched from Labour in the last election, Hawes warned – in the north-east, the north-west and the West Midlands. If the “impact is going to be a negative … it will undoubtedly be more profound on those areas”, he said.

By contrast, there is the potential for 40,000 well-paid and high-skilled jobs to be created in the “best-case scenario” of a successful transition to a zero-emissions future combined with “ambitious global trading terms”, the study concluded.

Hawes also called on the government to do more to protect the EU market for British cars, saying that international trade deals, such as with Australia, should “never be at the expense of existing neighbours and existing trade deals”.

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Meanwhile, Alison Jones, the country manager of Stellantis, the owner of Vauxhall, warned the future of its plant at Ellesmere Port was still in the balance.

The company was in talks with the government “and those were part of the equation” in relation to a final decision on the Vauxhall plant, she said.

The Stellantis chief executive, Carlos Tavares, recently said talks were “extremely positive and productive” but “aren’t enough” to safeguard the plant.

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