SMMT data highlights auto export prize: comment

“80% of the cars built in Britain are exported, the majority of which go to markets that are phasing out the sale of petrol and diesel cars and shifting to electric. If the UK’s car industry doesn’t alter production to match these trends, it faces a very uncertain future.

“If the government doesn’t support businesses in investing sufficiently in electrification, car industry output could fall by 73%, or £34bn, with more than 400,000 jobs lost. Get it right, invest in a speedier transition, and the industry’s contributions to the UK economy could increase by over £16bn, and support more than 167,000 new jobs”.  

A report commissioned by the Energy and Climate Intelligence Unit (ECIU), with analysis provided by CBI Economics [2], reveals that Gross Value Added (GVA) contributions of the automotive industry to the UK economy could vary by over £50bn, depending on how rapidly the sector transitions to the manufacture of Battery Electric Vehicles (BEVs). A rapid transition could see economic contributions increase by over £16bn by 2035, with 167,000 extra jobs created. Go slow, or stagnate, and the economic contributions of the sector could fall by a staggering 73%, or £34bn. Over 400,000 jobs could be lost as the industry contracts. 

Quentin Willson, advisory board member of Electric Vehicles UK, said: “It’s good to see SMMT figures today showing that UK auto is retooling for the switch to EV manufacturing. A smart move and forward thinking. This week the IEA reports that global sales of EVs will hit 17 million this year and that China sold 1.2 million New Energy Vehicles in September alone.

“The global message is clear - electrification is the future. This is a once in a generation opportunity for the U.K. And as our advisory board member, Andy Palmer, has said, the UK doesn’t need incentives on the cars themselves, but instead on charger roll out, bringing Gigafactories to the UK and a steely political will not to change sales targets. Auto Trader figures this week showed that sales of EVs are growing, with MG the lead, and BYD and Omoda gaining ground rapidly. The UK can onshore a huge EV industry which exports all over the world. Or it can tangle itself up with disinformation and misinformation and continue with sunset legacy ICE technology. It’s now or never. Let’s focus on the positives of the transition, not obsess about a dated combustion engine technology that’s hopelessly inefficient and polluting. Over in Europe ACEA figures for September showed that new EV sales grew 14% across the continent. The trend is clear.”

Stellantis and VW have recently warned of the dangers of trying to slow down the EV transition, describing it as a trap for the industry that would result in a prolonged period in which they would have to invest in both traditional engines and battery-powered cars. They called on Governments to act to speed up the transition. [3]