UK auto industry faces serious risk unless more support for electric transition – IMechE report

The transition to electric vehicles is posing a serious risk to the UK automotive sector as global competition intensifies. For the industry to survive, the Government needs to provide more incentives to consumers to buy electric cars as well as greater support to vehicle manufacturers, according to a new report from the Institution of Mechanical Engineers.

• Intense global electric vehicle competition poses a severe risk to the UK auto industry
• The zero emission vehicle mandate needs to be coupled with more incentives to make electric vehicles an attractive option for consumers
• UK Government support for manufacturers needs to increase to create a level playing field

In its report “UK Automotive Sector: Surviving the Net Zero Transition”, the Institution recommends measures to overcome the challenges faced by the industry which employs nearly a million people, providing highly skilled jobs in economically deprived areas.

Terry Spall, Past President of the Institution and co-author of the report, said:

“Though activity levels have been increasing, the UK is behind the curve as it progresses its transition to a zero emission fleet and Net Zero goals. Many significant hurdles have yet to be effectively addressed and the UK’s future competitive position as a global vehicle manufacturing nation is at stake.

It is not too late to save the industry and this report presents a plan to do so. Targeted strategic interventions will allow one of the UK’s globally iconic industries to survive and thrive in a future where road transport must transform to be smarter and completely decarbonised.”

The zero emission vehicle mandate requires car manufacturers to sell a rising percentage of electric vehicles each year from 2024. However, the report argues this will only drive a successful transition if there are other measures in place to make electric vehicles more attractive to consumers

The report’s recommendations include having mandated targets set by central Government to boost the number of electric vehicle charging points, with programmes to measure what works at local level. Given the delay of the 2030 ban on diesel and petrol vehicles, the Government should consider underwriting the investment risk of charge point providers.

Support for manufacturers needs to increase to create a level playing field, otherwise the UK risks importing most electric vehicles currently made here, with many coming from new market entrants such as China.

Part of this support is creating the right conditions for volume battery production in the UK, including enabling funding, supply chain development, securing and processing of critical minerals. This should include  incentivising local clusters around each factory to develop supply chains for other key parts of electric vehicles, not just batteries.