Battery ‘gigafactories’ could enable British manufacturers to produce up to 1m electric vehicles per year and ensure tariff-free access to critical markets in the EU, according to the Society of Motor Manufacturers and Traders (SMMT).
A new report, released today (29 June) by the organisation, also calls for the installation of 2.3m charging points by the end of the decade, to ensure all drivers have the confidence to invest in zero-emission vehicles.
The SMMT said those policy proposals, and 10 others contained in Full Throttle: Driving UK Automotive Competitiveness, could secure the future of one of Britain’s most important industries and support other manufacturing sectors. Automotive manufacturing employs about 180,000 people, contributes £15bn to the economy and is the country’s largest exporter of goods – “it is an industry that warrants unambiguous backing,” an SMMT announcement said.
If the government acts swiftly to enable and support the sector’s shift to ‘net zero’ and to secure ambitious global trading terms, the report – written by Public First – said the industry could gain 40,000 new, well paid and highly-skilled jobs by 2030. “This would provide a significant impact in auto heartlands such as the North-East and West Midlands, directly helping ‘level up’ the UK,” the announcement said.
Without government commitment, the SMMT said the industry risks decline. Already hit hard by the Covid-19 pandemic and trade complications arising from Brexit, analysis shows that the sector could lose 90,000 jobs in the worst-case scenario, with most of them outside London and the South-East.
Speaking today at the industry’s annual summit, SMMT chief executive Mike Hawes said: “The next few years represent a critical period for the sector. The pace of technological change is accelerating, and the competition more ferocious.
“If we are to secure vehicle manufacturing in this country, with all the benefits to society that it brings, decisions need to be made today. The automotive sector is uniquely placed to help this government deliver on its agenda – to level up, deliver net zero and trade globally.
“The government has made clear its support for the sector in its negotiations with Europe, so now is the time to go full throttle and take bold action to support one of Britain’s most important industries.”
The report’s 12 policy proposals are:
Technology & Innovation
1. Commit to creating 60GWh of battery production within the UK via gigafactories by 2030
2. Support development of a fuel cell gigafactory with 2GWh capacity, to support cars, heavier vehicles and rail units by 2030
3. Roll out a comprehensive and long-term skills strategy that supports the industry’s needs, combined with piloting greater flexibility in the Apprenticeship Levy to support retraining
4. Commit to the UK becoming a global leader in developing, testing, trialling and deploying connected and automated vehicle (CAV) technology
Manufacturing Competitiveness
5. Introduce a new ‘'Build Back Better Fund’ to support good manufacturing jobs for the future and help lower manufacturing costs such as energy
6. Allow net zero-critical industries, such as manufacturers of low-carbon, hydrogen and battery vehicles, to access the same benefits and compensation schemes as energy intensive industries and get more support within the UK Emission Trading Scheme (ETS)
7. Fund trial and demonstration projects to explore the use of hydrogen during manufacturing
8. Ensure the UK tax system helps position Britain as an attractive destination for global investment
Consumer, Market & Trade
9. Develop a holistic infrastructure strategy to ensure that at least 2.3m public charging points are in place by 2030
10. Commission an independent review to holistically consider the long-term future of fuel duty and CO2-based taxes, like vehicle excise duty, in a decarbonised sector
11. Continue Plug-In Vehicle Incentives beyond their current term and exempt Ultra Low Emission Vehicles from taxation for the next five years
12. Work with the industry to develop an ambitious, forward-looking trade strategy, which targets the sector’s most important markets.
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