Editor’s letter: UK EV making looks secure, but who will buy the cars?
Nissan has committed to manufacturing electric successors to the Qashqai and Juke in Sunderland
For so long, interventions from the UK government into the automotive industry have been scattergun, but suddenly it seems like there's some kind of strategy to hold everything together.
It started with the chancellor’s £2 billion-plus commitment to support zero-emissions investment in the automotive sector over the next five years, as part of a wider £4.5bn package to support green manufacturing in the UK.
Such numbers should always be taken with a degree of caution, lest for any double-counting on money already committed. But it was notable that Jeremy Hunt said this investment had been “warmly received by Nissan and Toyota”, neither of which could be tied to investments made so far as part of that £2bn and thus pointing to true new investments still to be disclosed.
Such namechecks are incredibly rare, so there was no slip of the tongue.
Indeed, Nissan’s reaction was seemingly so warm that, after months of work in the background between the Japanese firm and Westminster, it now looks set to commit to a wholesale reinvention of its Sunderland factory as an EV-only plant in the future.
The long-term future of Sunderland never really felt in doubt, but even so, it will be secure for well into the 2030s with the manufacturing of electric successors to the Qashqai and Juke from later in the decade.
So what now of Toyota? It's the only major manufacturer in the UK yet to commit to EV manufacturing here in one form or another in the future, yet Hunt’s intervention suggests that good news should be forthcoming from there too.
The winds of change have been running through the industry the past few months. It felt like we had hit rock bottom when Britishvolt collapsed, taking away the UK’s best site for a battery gigafactory in the UK, but since then Tata’s gigafactory has been announced and Mini has confirmed EV production in the UK.
What we have here already now looks increasingly secure in the future, and now the UK can look to secure new entrants for EV manufacturing. Even Tesla has been mooted as one potential arrival.
Two key strategic documents remain outstanding to tie this all together with a discernible plan to follow: the detailed manufacturing plan behind the headline £4.5bn/£2bn number and the wider battery strategy for the UK.
The latter is due this week, and it's set to lay out the details behind the government’s plans for “battery design, development, manufacturing and recycling” to “support economic growth, productivity and jobs”.
The automotive industry and EV production will of course play a key part in this, and clarity for would-be investors here could unlock further opportunities for UK EV manufacturing.
However, while manufacturing has taken a step forward, and the charging industry too, with easier connections to the National Grid, projected EV uptake itself has taken a big step back.
The Office for Budget Responsibility said alongside Hunt’s Autumn Statement that it expected EV uptake to be almost half what it had predicted by 2027, down from 67% of new car sales in the UK to 38%.
EVs are losing the PR campaign in the national conversation and are seen as too expensive.
SMMT boss Mike Hawes says the government must demonstrate “how it will support consumers in making the switch to zero-emission motoring”, as without intervention, rising interest rates and falling fuel prices will continue to stagnate their growth.
So too will the frankly weird campaign against them from some clickbait-hunting national newsdesks.
This is bad news for the government, with its net-zero targets, and bad news for the industry, which faces huge fines should its EV sales not reach certain thresholds from next year.
What can help solve both of these things is for the government to offer support to encourage EV uptake.
Without it, the risk is that the government’s finger has been moved from one hole in the bucket to another.