UK (Common Wealth) _ Failure to strengthen electric car supply chains, combined with impending post-Brexit tariffs, could cost the UK car sector more than £100 billion in growth, according to a key industry group.
According to a recent research from the Society of Motor Manufacturers and Traders (SMMT), a possible 10-fold increase in the manufacturing of electric cars worth £106 billion is at stake.
The UK’s automotive sector will become “uncompetitive” in the face of “fierce global competition” unless the government invests in British manufacturing plants, assists in scaling up their EV supply chains, and reworks the incoming export tariffs introduced by the UK-EU trade deal, according to the SMMT.
New EU post-Brexit rules, which take effect in January 2024, will impose a 10% duty on electric car exports between the UK and the EU if at least 45 percent of their value does not originate in the UK or the EU. The SMMT’s CEO, Mike Hawes, stated, “The government has set the industry tough targets, and we are committed to meeting them.”
Carmakers are in the midst of the most fiercely competitive investment landscape in a generation and require an immediate UK response, using every policy, fiscal, and regulatory lever available to make Britain the most appealing location to invest, he said at the group’s annual summit.
Because the automotive sector rises to every challenge, he issued a challenge to all political parties today: back us up with the appropriate conditions, and we will turn our commitments into opportunities for our industry, jobs, the environment, and the UK.
The calls follow a turbulent start to the year for Britain’s automotive industry, which has seen the government chastised for jeopardizing the UK’s position in the global EV race.
Stellantis, the owner of Vauxhall, and other major auto makers warned in May that the additional levies could jeopardize UK plants. Today, Hawes cautioned that such levies put the entire sector’s growth “at risk.”
The industry is also waiting to see if the UK has beaten Spain to a new ‘gigafactory’ developed by Jaguar Land Rover’s owner Tata.
Some have hailed the conclusion as critical to guaranteeing the future of the UK’s EV sector, while one industry insider told City A.M. that many fear the government has already lost the boat.
The SMMT also warned that persistent inflation and high energy costs were further hammering Britain’s automotive industry, with more than 80% of companies in the sector notifying the trade body that rising input costs were limiting profitability despite increased demand.
