UK car industry falling behind EU and China with 'reactive sticking plaster approach' to electric vehicles

UK car industry falling behind EU and China with 'reactive sticking plaster approach' to electric vehicles

Rishi Sunak comments on new £2billion investment into Nissan EVs

Felix Reeves

By Felix Reeves

Published: 23/01/2024

- 09:07

Updated: 24/01/2024

- 15:51

Experts have called for urgent policy changes to ensure the UK remains competitive

The automotive industry in the UK could face the prospect of falling behind the rest of the world when it comes to manufacturing new electric vehicles.

Experts are warning that the historic vehicle manufacturing industry that has been heralded across the UK over the last century could be left behind.

Researchers are calling for urgent policy intervention and a focused effort to ensure the UK’s automotive industry remains a “critical pillar” of the economy.

The findings, from Aston University’s Centre for Business Prosperity, stated that the UK is in a weak position to capitalise on the EV revolution.

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Jeremy Hunt and Rishi Sunak at the Nissan EV factory

Jeremy Hunt and Rishi Sunak at the Nissan EV factory celebrating the huge £2billion funding boost


Authors Professor Jun Du and Dr Oleksandr Shepotylo also warned that the UK would miss out on immediate market opportunities, prompting the need for policy changes.

The “Powering the Future: Aligning Economic Policy for Automotive Sector Resilience in the Face of Critical Material Challenges” report suggested that the UK was “heavily exposed” because of reliance on battery imports.

The vast majority of batteries currently come from Germany and China, with Chinese manufacturers rapidly rolling out their electric vehicles across Europe in a bid to dominate the EV market.

Experts suggested that the main challenges facing the UK automotive sector include technology, socioeconomic changes and the ever-changing geopolitical landscape.

Jun Du, professor of economics at Aston Business School, said: “Cultivating a resilient and competitive UK automotive industry demands policy ideas that align with the ever-evolving dynamics of the global electric vehicle market.

“Our research highlights the weakness of the UK’s current position and outlines the strategic interventions urgently needed to fortify the UK’s interests and navigate the transformative landscape of the electric vehicle revolution.

“The implementation of these recommendations can effectively cement the UK’s leadership position in the realm of electric mobility, ensuring enduring growth, competitiveness, and innovation.”

The report also highlighted the UK’s departure from the European Union and the impact it had on the Trade and Cooperation Agreement.

On January 1, 2024, the new “Rules of Origin” were introduced allowing manufacturers in the UK and EU to avoid massive tariffs for the coming three years, saving manufacturers and drivers around £4.3billion.

Recommendations in the report include targeting global opportunities, advocating for the optimisation of trade policy and investing in EV battery production.

​Nissan is the latest major manufacturer to boost its activity in the UK, investing a further £2billion in its Sunderland electric vehicle plant last November.

The Japanese marque said the funding would go towards the production of two new EVs – the Juke and Qashqai – as well as a new gigafactory.

The report also calls on the Government and manufacturers to focus on creating an industrial strategy and underscoring the significance of global value chains.

Dr Oleksandr Shepotylo, senior lecturer in economics at Aston Business School, said: “The report also shines a light on the level of Government intervention in the EU, US and China, as all have a coherent industrial strategy that capitalise on the shift to net zero, whilst the UK does not, favouring a reactive sticking plaster approach, such as the short term extension of Rules of Origin deadline with the EU.


Car manufacturing

Experts are warning that the UK is falling behind in EV production 


“Whilst this provides respite to the UK the risk is that the gap with its competitors widens.”

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