The Government has been urged to “wake up and grab the steering wheel” after it was accused of doing little to help UK car makers in the move to electric vehicles.
Ministers and officials are lobbying Brussels over a Brexit trade deal deadline which could pose an “existential threat” to parts of the British automotive industry, putting thousands of jobs at risk. Business and Trade Secretary Kemi Badenoch has raised the issue with counterparts in Brussels ahead of a looming cliff edge when new rules covering electric vehicles (EVs) come into effect at the start of 2024.
Vauxhall’s parent company Stellantis told MPs this week that it will be unable to keep a commitment to make EVs in the UK without changes to the Trade and Co-operation Agreement (TCA) with the European Union. Under the TCA, from next year 45% of an EV’s value should originate in the UK or EU to qualify for tariff-free trade.
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Without meeting the requirements, cars manufactured in the UK would face a 10% tariff if sold in the EU – and vice versa – rendering them uncompetitive. Shadow business secretary Jonathan Reynolds – who earlier this week outlined Labour plans to part-fund eight gigafactories around the UK – asked Business Minister Nus Ghani “how it will secure battery making capacity that we desperately need in the UK?”
He added: “Will this Government wake up, grab the steering wheel, and get control of the situation before it is far, far too late?”
Ms Ghani listed a series of “programmes in place” to “support the whole of the automotive sector”, including existing financial support for car makers. She also spoke about hosting meetings with the automotive council, which included companies like Aston Martin, and Jaguar Land Rover, which she said were “absolutely key to continue to working with us to ensure that we have supply chains here in the UK”.
Setting up battery gigafactories is seen as key to the future of the automotive sector as sale of new petrol-fuelled vehicles is due to be ended in 2030. But the failure of the Britishvolt project in Northumberland earlier this year showed the difficulty of raising the vast sums of money needed to build the plants.
The Britishvolt collapse leaves the Envision AESC plant at Sunderland – which supplies Nissan – as the sole UK gigafactory. Speaking later in the day, Chancellor Jeremy Hunt told the British Chambers of Commerce conference there was global pressure on the supply of batteries for electric vehicles but hinted at further announcements on UK capacity.
“All I would say is watch this space because we are very focused on making sure the UK gets that EV manufacturing capacity,” he said.
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