Automotive industry bosses have called for incentives to help private buyers switch to electric vehicles, claiming that it is vital to ensure continued investment in the UK car production.
The Society of Motor Manufacturers and Traders (SMMT) says the UK automotive manufacturing sector has secured around £20 billion of investment this year, compared with a total of £16.2bn in the previous seven years combined.
Those investments include around £2bn of fresh investment in Nissan’s Sunderland plant to build two new EVs and a third battery factory, £600 million by BMW to build electric Minis in Oxford and around £4bn for the planned battery factory in Somerset by JLR (formerly Jaguar Land Rover) parent Tata Group.
Speaking at the SMMT annual dinner, chief executive Mike Hawes said: “The industry is betting big on Britain, and government has rightly recognised the value that automotive manufacturing brings to the UK.”
But Hawes added that the investments were “predicated on a strong domestic market”, noting that EV sales have begun to plateau recently as car firms try to appeal beyond early adopters. Notably, the bulk of EV sales in this country are still to business buyers, who benefit from tax breaks. By contrast, the government no longer offers any subsidy to private EV buyers.
In addition, the independent Office for Budget Responsibility (OBR) recently noted that the decrease in the price gap between combustion-engined cars and EVs was beginning to slow, potentially increasing the time it takes to achieve price parity.
Hawes added: “Incentives for business buyers must be matched with support for private buyers to ensure the maximum return on every penny already pledged to production. The prize for success will be a faster and fairer decarbonisation of Britain, ensuring millions have access to zero-emission mobility.”
The government has pledged a further £2bn investment in the automotive industry in its new Advanced Manufacturing Plan. The SMMT claims that nearly a million people rely on the sector for their livelihood.
Alison Jones, who is president of the SMMT and Stellantis’s vice-president for global circular economy, cited the industry’s resilience as being vital to its success. She said: “We have moved forward despite the instability, despite legislative uncertainty, inflation and geopolitical risk.
“The industry has backed itself with big decisions on big investments to guarantee jobs and our future. We have seen major commitments in battery production, lithium mining, vehicle manufacturing, R&D and the aftermarket. Such investment – and our ability to remain competitive – is key to the continuation of a strong UK manufacturing base and a sector that sustains nearly a million livelihoods.”
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