Let's not drive automotive into the ground

While there is still joy to be found here for the diehard petrolhead -  Steve McQueen's Ferrari 275 GTB/4, anyone? – the lion's share of news in this sector now appears to be all about electric vehicles, indication that for better or for worse the age of the EV is well and truly upon us. Don't trust the accuracy of the patented editor's in-box barometer? Well, you only have to look at the latest UK figures for new car sales to see that Tesla's Model was March's best selling model, an achievement helped no doubt by price reductions of up to £8k.

Apart from the much-touted environmental advantages of EV, widespread adoption of the technology also has the potential to bring huge economic gains. However, in order to reap the rewards here in the UK, businesses need to be incentivised to invest here - something which decidedly does not seem to be happening. This was gently highlighted by automotive industry veteran, Andy Palmer, who said that it was "probable" car firms would leave the UK without a subsidy package similar to the billions in support already being provided in the US, and proposed by the EU. Palmer, who has had senior jobs at Nissan and Aston Martin, even went so far as to say that the sector is facing the "last throw of the dice".

Establishing battery plants is critical to the survival of the UK automotive sector. Batteries are one of the most expensive components of electric vehicles and a local supply is a key deciding factor when manufacturers are assessing new plants, and the collapse of Britishvolt and its subsequent purchase by investors aiming to move focus away from car batteries has come as an undeniable blow.

Meanwhile, Jaguar Land Rover (JLR)’s Indian conglomerate owner Tata has made construction of a UK gigafactory dependent on a government cash injection worth hundreds of millions of pounds in order to adapt its ageing Port Talbot facility to produce carbon-neutral steel. While this in itself isn't a bad thing – after all, we are trying to save the planet here – there are reasons why this might not happen, not least of which is that rival car and steel makers that have funded green projects independently will likely be more than a bit miffed.

Anyway, chancellor Jeremy Hunt has said that the UK will not go toe-to-toe with the US and EU when it comes to subsidies, preferring a "different - and better" approach. "With the threat of protectionism creeping its way back into the world economy, the long-term solution is not subsidy but security," he said. This does make a good soundbite, but with the likes of Germany approving a €1bn support package for a steelmaker to use hydrogen in its processes to replace coal, is it a line that can be held without detrimental effect on investment in the UK?

Charlotte Stonestreet

Editor