The Society of Motor Manufacturers and Traders has called for the government to provide a dedicated 'Build Back Better' fund for the UK automotive industry, supporting its transformation and recovery from the pandemic.
Noting that the industry is worth £15 billion annually to the national economy, employs around 180,000 people and is the primary exporter of goods, the trade body outlined the need for financial aid to ensure its continued competitiveness.
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The SMMT's proposed strategy comes after new production figures showed that the UK's new car output remains less than half that of 2019 as a result of the pandemic and semiconductor shortage – and less than nine years before sales of new combustion-engined cars are set to be banned here.
Governmental support is needed, according to the SMMT, to preserve UK automotive jobs, grow EV battery production capacity and improve skills in the sector.
The body said: "The UK industry has many strengths: the diversity of its companies, its engineering excellence, innovation, a highly skilled workforce and the strength of the UK market. But the global industry is fiercely competitive, and weaknesses must be addressed if its long-term success and the benefits that come with it are to be assured."
Chief among the SMMT's ambitions is for the UK to have 60GWh of battery-building capacity by 2030 - enough to build one million EVs per year without incurring punitive tariffs in trading with "critical markets" in the European Union.
It's widely reported that Nissan is on the verge of confirming its own plans to boost battery production in the UK, with a new gigafactory in Sunderland set to open by 2024 and have an eventual output of 20GWh. A new Nissan EV is also on the cards for production in Sunderland, alongside the Qashqai, Nissan Juke and Nissan Leaf EV.
SMMT chief executive Mike Hawes welcomed reports of Nissan's plans but said that more needs to be done: "That's a tremendous boost in the arm, a real vote of confidence, but it's one. I've spoken about the level of capacity we have in the UK for battery capability; there's already a production plant in Sunderland, which they [Nissan] are looking to expand with their Envision partner. We need more than that.
"Germany has many times the capacity committed to investment, and we're seeing that across Europe. It's a fiercely competitive industry and, under the terms of agreement with Europe by 2027, to avoid tariffs, effectively batteries need to be made in the UK or Europe."
The news, if confirmed, will be "very good for the region" of Tyne and Wear, Hawes said, but to ensure further growth in the sector, the UK needs to have "the framework to attract battery investment and sustained manufacturing".
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