The UK automotive business has attracted roughly £20 billion in personal funding in 2023, in keeping with the most recent calculations by the Society of Motor Producers and Merchants (SMMT) – that means this 12 months has seen extra funding introduced than in all of the years again to 2016 mixed.¹

On high of business’s backing for brand spanking new and upgraded R&D and manufacturing services, final week the federal government dedicated an additional £2 billion for the sector, backed by an Superior Manufacturing Plan and battery technique that may drive inexperienced financial progress and create jobs throughout each a part of the nation. With virtually 1,000,000 folks immediately counting on the sector for his or her livelihood, and hundreds of thousands extra benefiting from the mobility it gives, the significance of the UK automotive business to the financial system has by no means been extra evident.

Addressing business leaders and politicians on the SMMT’s 106th Annual Dinner in London this night, Alison Jones, SMMT President and Senior Vice President International Round Economic system, Stellantis, praised the business’s resilience and dedication to inexperienced progress, saying,

As an business, we now have moved ahead regardless of the instability, regardless of legislative uncertainty, inflation and geopolitical danger. The business has backed itself with large choices on large investments to ensure jobs and our future. Now we have seen main commitments in battery manufacturing, lithium mining, automobile manufacturing, R&D and the aftermarket. Such funding – and our skill to stay aggressive – is vital to the continuation of a powerful UK manufacturing base and a sector that sustains almost 1,000,000 livelihoods.

With new funding bulletins coming as not too long ago as final week, Britain has confirmed itself as a globally aggressive place to fabricate zero emission automobiles, batteries and parts. Factories throughout the nation at the moment are producing electrical automobiles of each sort – automobiles, vans, buses and vehicles – whereas the provision chain manufactures virtually each element wanted for EVs. The business is able to return to pre-pandemic ranges of commerce price greater than £100 billion by the tip of the 12 months, however the problem is now to scale up even additional to grab the alternatives decarbonisation affords.

Regardless of this renewed vote of confidence, the business’s potential to drive financial progress will likely be diminished with no deferral of upcoming Guidelines of Origin – in any other case, tariffs will apply, throttling commerce in electrical automobiles between the UK and EU. The UK authorities and most main European nations recognise the hazards of inaction and have referred to as for a typical sense resolution to make sure the free and honest circulation of EVs throughout the Channel. Nonetheless, time is working out to safe a deal earlier than the tip of 12 months deadline.

Whereas exports nonetheless account for round 80% of manufacturing, the UK should even have a powerful home market to maximise return on the investments made. Having initially grown robustly, EV uptake is now plateauing because the market begins to maneuver past the ‘early adopter’ part. Authorities incentives are driving the enterprise and fleet markets, however a good transition calls for that non-public shoppers are additionally inspired to make the change.

Mike Hawes, SMMT Chief Government, mentioned:

The business is betting large on Britain, and authorities has rightly recognised the worth that automotive manufacturing brings to the UK, backing our industrial transformation. These investments are, nevertheless, predicated on a powerful home market. Incentives for enterprise patrons should be matched with help for personal patrons to make sure the utmost return on each penny already pledged to manufacturing. The prize for achievement will likely be a sooner and fairer decarbonisation of Britain, making certain hundreds of thousands have entry to zero emission mobility.

Fiscal incentives for enterprise patrons, notably in firm automobile tax, have ensured this phase of the brand new EV market continues to carry out strongly. To maneuver uptake to the mainstream, nevertheless, all purchasers must be inspired to modify. Halving VAT on new EVs, for example, can be a compelling and inexpensive measure, enabling producers ship bigger volumes of zero emission automobiles and creating the circumstances for higher UK provide chain funding – one of many important ambitions of the federal government’s newly printed Superior Manufacturing Technique.

Mixed with retention of the enterprise incentives and measures to speed up the roll out of charging infrastructure, the brand new EV market would increase and circulation into the used sector, catalysing higher adoption by all drivers. This would be the quickest strategy to decarbonise street transport, an important step within the supply of Internet Zero.
Notes to editors

1 SMMT calculations primarily based on all publicly introduced funding in UK automotive manufacturing and R&D from Jan-Nov 2023. Complete introduced funding 2016-2022 inclusive: £16.2 billion.

SOURCE: SMMT