British car factories began laying off workers last year as supply chain and tariff adjustments triggered by Brexit began to take effect. The British government once thought that investing a billion pounds in a new super-battery plant would revive the region’s ailing car industry. But so far, the UK has not persuaded battery makers to set up factories.
Industry research suggests that a superfactory is not enough to meet the need for electric cars for local carmakers looking to switch to electric vehicles. Jaguar Land Rover’s chief executive even declared last year: “If battery manufacturing leaves the UK, then car assembly will also leave the UK.” “
During the general election campaign, the Conservatives had pledged to invest a billion pounds in research and development and make significant investments in the battery industry. Previously, the UK government invested 28 million pounds to build the UK’s battery industrialization centre, hoping to provide “a springboard for us to build a super factory in the UK”.
But that will not compensate for the loss of Brexit. Concerns about tariffs on supply chains and finished goods sales have made carmakers reluctant to risk investing heavily in the UK. Elon Musk, Tesla’s founder, has made it clear that he chose to build the first European super factory in Germany rather than the UK, at least in part because of Brexit. Carmakers such as BMW and Vauxhall have said they could leave the UK in the face of a Brexit decision.
Ian Constance, chief executive of the UK Advanced Drive Centre, said: “The European market is certainly much larger, which is why you will see initial investment flow ingres there. “
David Bailey, a professor of business economics at Birmingham Business School, says Germany has not only no Brexit problems, but also a 1bn euro fund for electric cars. Poland and Hungary have established special economic zones to provide tax breaks for battery production.
He noted that companies such as Samsung SDI in Hungary, LG Chem in Poland and Northvolt in Sweden are all building larger factories. Mr Bailey said the plants would attract electric car makers into a virtuous circle, with the UK excluded.
In addition, sales of electric cars in the UK account edged only 2% of total sales, and the government has cut car-buying subsidies by a tenth of the total, resulting in a 10 per cent drop in sales. Fewer electric vehicles means less demand for charging infrastructure, etc. If there is no market, there will be no manufacturers.
Brexit, combined with competition from key countries such as Germany, means it will be difficult for the UK to persuade battery makers to set up factories there. That said, britain still has an advantage in research and manufacturing.
Sunderland built a battery factory back in 2010, giving the UK the power of battery technology. In addition, UK universities have conducted extensive research on batteries, which means that experienced experts, intellectual property and derivatives abound.
“We have very good and strong research and development,” said Stephen Gifford, faraday’s head of institutional economics and market insight. “We may not have large battery plants in China, but there are some powerful small and medium-sized battery companies. “
“We have the largest electrolyte plant in Europe in the northwest,” Constance said. “We have battery-grade nickel refineries in Wales. Humberside is the largest producer of anode carbon materials. We already have the core elements of the supply chain. “
But if the electric car manufacturing industry is not started and operated, BRITISH universities will develop products that will be produced elsewhere and the chemicals will be exported directly elsewhere.
This means that the government needs to provide more policy support and funding. Despite some local advantages, investing billions of pounds into it will not overcome the challenges of Brexit and competition in the market. These efforts may not be enough to give the UK a leading position in the battery industry, or to actually help those who are now unemployed.