Electric cars .. Britain’s first race after Brexit

British automakers have warned the country must build its own electric vehicle battery industry in the coming years or it will lose the race to the benefit of the European Union.

Mike Howes, CEO of the Association of Auto Manufacturers and Traders, said the Brexit deal reached late last year gives automakers and their suppliers little time to locate production, considering that “It is a difficult task for an industry emerging from the largest annual decline in car sales since 1943,” according to Bloomberg.

As part of the deal, batteries must get 30% of their content from Britain or the European Union as a first step, to be marketed duty-free, and those requirements will become more stringent from 2024.

Hybrid and electric cars will also be subject to rules of origin, given the current lack of domestic battery production. But it will become more difficult in three years.

Industry is struggling

Howes explained that the requirements put UK car factories in trouble because battery packages are heavy and it will be expensive to ship from factories in the European Union, so having factories in Britain is important. to fuel local car collection sites.

Currently, the battery industry in Britain is limited to one location which supplies Nissan Leaf electric sedans in Sunderland, England. Britishvolt Ltd announced plans to build a factory in the north-east of England last month, but the company has revealed few details on how the project will be funded.

Battery makers like LG Chem Ltd and Samsung Electronics Co, as well as startups like Northvolt AB, plan to increase their capacity in the coming years elsewhere in Europe, and Germany and France are among the governments promising billions to support these projects.

Electric car sales were a bright spot in a bleak year for the UK auto industry, with deliveries plummeting 29% in 2020, equivalent to over £ 20bn ($ 27bn) of lost income, according to SMMT.

British concerns

In contrast, 2020 was a banner year for electric and hybrid cars, which accounted for more than one in ten recorded sales, down from around one in 30 in 2019, according to Bloomberg.

UK automakers have expressed concerns that even with a deal regulating ‘Brexit’, new UK-EU border controls and customs checks threaten to hamper the flow of important goods between the two sides, which will cause major problems for the UK auto industry in particular. Supply chains are weakening.