The Society of Motor Manufacturers and Traders has called for the government to provide a dedicated ‘Build Back Better’ fund for UK automotive, which would support the transformation and recovery of the industry in the wake of the pandemic.
Noting that the automotive industry is worth £15bn annually to the national economy, employs around 180,000 people and is the primary exporter of goods, the trade body outlines the need for financial aid to ensure the sector’s continued competitiveness.
The SMMT’s proposed strategy comes after new production figures showed the UK’s new car output remains less than half that of 2019 as a result of the pandemic and semiconductor shortage, and less than nine years before sales of new combustion-engined cars are set to be banned.
Governmental support is needed, according to the SMMT, to preserve UK automotive jobs, upscale EV battery production capacity and upskill the sector.
The body said: “The UK industry has many strengths – the diversity of its companies, its engineering excellence, innovation, a highly skilled workforce and the strength of the UK market, but the global industry is fiercely competitive, and weaknesses must be addressed if its long-term success – and the benefits that come with it – are to be assured.”
Chief among the SMMT’s ambitions is for the UK to have 60GWh of battery building capacity by 2030 – enough to build one million EVs per year without incurring punitive tariffs in trading with “critical markets” in the EU.
It is widely reported that Nissan is on the verge of confirming its own plans to upscale battery production in the UK, with a new gigafactory in Sunderland set to come online by 2024 with an eventual output of 20GWh. A new electric model is also on the cards for production in Sunderland, alongside the Qashqai, Juke and Leaf.
SMMT chief executive Mike Hawes welcomed reports of Nissan’s plans, but said more needs to be done: “That’s a tremendous boost in the arm, a real vote of confidence, but it’s one. I’ve spoken about the level of capacity we have in the UK for battery capability; there’s already a production plant in Sunderland which they [Nissan] are looking to expand with their Envision partner – we need more than that.
“Germany has many times the capacity committed to investment, and we’re seeing that across Europe. It’s a fiercely competitive industry and, under the terms of agreement with Europe by 2027, to avoid tariffs, effectively batteries need to be made in the UK or Europe.”
The news, if confirmed, will be “very good for the region” of Sunderland, Hawes said, but to ensure further growth in the sector, the UK needs to have “the framework to attract battery investment and sustained manufacturing”.
There is potential, estimates the SMMT, for 40,000 new jobs to be created across UK automotive as par of the transition to zero-emission mobility, but it adds that without sufficient support and investment, some 90,000 jobs could be lost.
The fund would also be used to expand the UK’s oft-criticised EV charging infrastructure, with the SMMT calling for at least 2.3 million new charging points to be installed across the country by the end of the decade.