Car industry under threat without more support for battery production, peers warn

Government must act now to safeguard industry and create green jobs, says Lords committee

(PA Wire)

The UK car industry’s future is under threat because government rhetoric on green vehicle production has not been matched by action, a cross-party group of peers has warned.

The House of Lords Science and Technology Committee said the UK risks falling further behind global competitors in battery manufacturing which is vital to ensure electric vehicles are built in the UK.

Ministers have not taken sufficient action to meet their stated ambition to reach net zero carbon emissions by 2050, the committee said.

It also accused the government of failing to capitalise on the UK’s expertise in fuel cells and next-generation batteries, in which it "could take a global lead".

The committee’s damning assessment is the latest warning that the UK is lagging far behind on battery production, which needs to ramp up drastically ahead of a ban on the sale of internal combustion engine cars from 2030.

A report from the Faraday Institution found that by 2040 the UK would require seven gigafactories each providing 20GWh per year of batteries to satisfy projected demand. According to an estimate from the Society of Motor Manufacturers and Traders, 90,000 jobs could disappear unless investment in new battery production is increased.

The Lords' report urges ministers to overhaul their approach to battery manufacture by developing UK supply chains and securing the raw materials required.

It stressed that action was needed soon due to the phased introduction of stricter Rules of Origin requirements by 2027 which could result in tariffs being applied to UK exports and result in manufacturing moving to the EU.

The report also calls for more training and immigration to ensure there are enough workers with skills needed to make electric vehicles, as well as more funding to develop next-generation technologies.

Other recommendations include speeding up the installation of public charging points and a rapid decision on the phasing out of new HGVs.

“The government must act now to avoid the risk of the UK not only losing its existing automotive industry, but also losing the opportunity for global leadership in fuel cells and next-generation batteries," said committee chair Lord Patel.

"The government must develop a coherent successor to the industrial strategy and promote its objectives clearly, both domestically and internationally, supported by investments commensurate with those of the UK's international competitors.”