The flagging UK automotive business is shifting too slowly on battery manufacturing to compete at the world marketplace


Automobile production in the United Kingdom stalled dramatically final 12 months. The top of the business industry frame described the placement because the “hardest in a long time”, and the numbers undoubtedly again up his declare.

The most recent automotive registration figures display that 2021 was once up simply 1% on a COVID-ravaged 2020 – and manufacturing in truth went into opposite equipment.

In November 2021, UK automotive manufacturing dropped by means of virtually 29%, the 5th consecutive month of output falling, and the worst because the mid-Nineteen Eighties. October’s figures were the worst because the Fifties.

General, automotive making as much as November 2021 was once 6.2% beneath that of 2020, with 797,261 automobiles made – worse even than a 12 months through which UK manufacturing was once so badly suffering from manufacturing facility stoppages led to by means of the primary lockdowns.

This issues now not just for the 180,000 other folks hired without delay in auto production or the 864,000 jobs around the wider automobile business. The business accounts for 13% of general UK export of products, value £44 billion, and invests £3 billion each and every 12 months into automobile analysis and building.

Neither is this simply a topic for the United Kingdom. The worldwide microchip scarcity had a big have an effect on in 2021, and may price the worldwide auto business up to US$210 billion (£155 billion) in misplaced gross sales in 2022, with output curtailed by means of virtually 8 million cars.

Of the automobiles that had been made in the United Kingdom, over 80% had been because of be exported, with maximum of the ones (some 60%) certain for the EU. Asia accounted for 15.6% of UK automotive exports, the USA 13.4% and Australia 1.2% (that new industry maintain Australia is welcome however gained’t actually spice up UK automotive exports a lot). General, exports to the EU fell by means of 29% in comparison to the similar duration in 2020, with extra dramatic falls additional afield, down by means of 57% to Japan and by means of 67% to the USA.

Now the executive govt of the Society of Motor Producers and Investors, Mike Hawes, has known as for extra enhance for the business. He additionally flagged up dangers round new customs preparations between the United Kingdom and EU that come into impact from January 1 2022.

He mentioned: “With an increasingly more unfavourable financial backdrop, emerging inflation and Covid resurgent house and out of the country, the instances are the hardest in a long time.

“With output hugely down for the previous 5 months and more likely to proceed, keeping up cashflow, particularly within the provide chain, is of important significance. We need to glance to executive to supply enhance measures in the similar manner it’s recognising different COVID-impacted sectors.”

A smoother adventure

Having a look forward, a new manufacturing outlook record forecasts that UK automotive and van manufacturing may edge above 1,000,000 in 2022, or even succeed in 1.2 million in 2024. Again in 2016, the United Kingdom produced 1.7 million a 12 months. However that now turns out a long time in the past, with output broken ever since by means of a mix of worldwide markets, Brexit uncertainty, and COVID-related provide chain problems.

Long run, the car business has to maintain essentially the most pronounced exchange in its historical past, with a fast shift now underway against battery powered electrical cars. The United Kingdom executive has set a 2030 closing date to section out the sale of petrol and diesel automobiles, however insurance policies to in truth get there appear half-hearted.

Development isn’t helped for instance, by means of the sluggish pace of charging infrastructure roll out, or the large reduce in subsidies to be had for brand new battery electrical cars because of this many don’t qualify for enhance.

Sign on ground indicating parking space for charging an electric vehicle.
Plugged in?
Shutterstock/Jevanto Productions

On a favorable notice, British manufacturing of battery electrical cars and hybrid automobiles (with a combustion engine and a battery) took a document percentage of manufacturing in 2021, accounting for round a 3rd of all automobiles made in November, and greater than 1 / 4 (26%) over the 12 months.

Of the ones, battery electrical automobile output was once up in November by means of 53% to ten,359 gadgets, hitting a brand new top of just about 14% of manufacturing, greater than double the extent a 12 months in the past. UK-based automotive makers like Nissan, MINI and the London Electrical Automobile Corporate produced greater than 60,000 0 emission cars in 2021.

However UK battery manufacturing is lagging in the back of main funding around the EU, which is aiming to be impartial in battery manufacturing by means of 2026, and has introduced in combination seven international locations to shape the Eu Battery Alliance. And whilst there may be showed funding in only one battery “gigafactory” in the United Kingdom, there are a minimum of 15 underneath development in international locations together with Sweden, France, Germany, Hungary and Poland.

Funding in battery manufacturing in the United Kingdom will wish to be sped up dramatically given the shift to electrical cars now underway. Past that, higher and extra joined-up enhance for the car business shall be had to get to 2030 with a viable mass UK auto business intact.



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