Think tank Policy Exchange has released a new paper calling on the UK Government to make a “realistic assessment” on the condition of the UK’s EV market.
The paper, dubbed The future of the UK auto industry, recommended that the Government be realistic in its evaluation of the UK EV market in comparison to the world market. Alongside this, the Government must be consistent with the support it provides to the auto industry, the think tank continued.
According to Policy Exchange, the UK should not engage in a subsidy race with the EU and the US. The government should instead look to remove or mitigate some of the obstacles that are having an impact on investment, such as high energy costs.
There are other areas that are plaguing investment for the UK auto industry. This includes land use and planning regulations, where potential investors in UK gigafactories (which require very large sites) are “facing particular problems”.
One of the crucial conversations within the EV debate is the volume of required battery manufacturing to maintain the UK’s prosperous auto industry. The paper states that “based on the expected growth in production of electric vehicles, UK demand for battery manufacturing capacity would reach over 100GWh by 2030, the equivalent of five gigafactories”.
This is a huge gulf that will need to be rectified; otherwise the UK could lose its leading position in the global auto industry.
Despite these shortcomings, the government has emphasised its support to scale the UK’s EV market. The paper said that Rishi Sunak, the UK Prime Minister, wants to turn the nation into “one of the best locations in the world for the manufacture of electric vehicles, with an end-to-end zero emission vehicle supply chain”.
Despite this support, it is unclear how this ambition is to be achieved and whether “more generous support” for gigafactories will be provided.
According to Policy Exchange, now is the perfect time to undertake an assessment of where the industry stands and where financial support should be directed. From this, a coherent policy should be developed on which manufacturers and investors can rely upon.
