Prime Minister Rishi Sunak has less room for spending to support what’s left of Britain’s car manufacturing base.
Chancellor Jeremy Hunt last week announced a series of £55 billion ($66.7 billion) tax increases and spending cuts in what free market think tanks called a “recipe for managed decline”.
Among them are plans to begin imposing a road tax on EVs in the next few years.
Britain’s austerity measures add insult to the wounds caused by Brexit, which plunged the country into a long period of uncertainty and delays in car investment.
In the 12 months leading up to the 2016 referendum, the UK produced around 1.7 million cars. Over the past year, automakers have produced less than half that amount.
“We are witnessing slow-motion car crashes in the UK auto industry,” said David Bailey, a professor of business economics at the University of Birmingham. seems to be
Efforts to modernize the UK auto industry threaten thousands of industrial jobs as the transformation redraws the map of where cars are built.
BMW announced last month that it would move production of its electric mini hatchback from Oxford, England, to China.
Honda closed its car factory in Swindon last year, leaving only four mass-produced manufacturers in the UK: JLR, Nissan, BMW and Toyota.
In the 1950s, Britain was the world’s second largest automobile manufacturing base.
It has since fallen to 18th place behind rivals such as Canada and Slovakia.
Local demand is no reason to stick around. The company is headed for its worst year of market sales since 1982.
Even more worrisome is the lack of a substantial battery supply chain in the UK to support mass production of EVs.
The country has only one operating cell factory of reasonable size, owned by China’s Envision Group, and has failed to attract investment in additional large-scale facilities.
British Vault was at the center of plans to build a factory in the north of England to supply batteries for millions of electric cars. However, the startup backed by mining giant Glencore is now seeking funding to continue beyond early December.
The company’s struggles, less than three years old, have created a chicken-and-egg dilemma. UK car makers are reluctant to build new or retrofit existing plants unless they can source battery cells nearby. unwilling or unable to invest without substantial assistance from
Unlike Swedish rival Northvolt, which has signed a deal worth around $55 billion with a major automaker, Britishvolt has not secured a large order.
The company has outline agreements with Aston Martin and Lotus, but neither of the two low-volume manufacturers has made firm commitments.