Survival of car industry depends on gigafactories

Alan Tovey
·3-min read
electric car
electric car

Britain's car industry will suffer a devastating blow if the country fails to build battery factories ahead of a 2030 ban on new petrol and diesel vehicles, experts have said.

Factories could be forced to shut and new car prices will rise unless the UK urgently develops so-called gigafactories to power the electric models of the future, MPs on the Environmental Audit Committee heard as they opened an inquiry into the shift away from fossil fuels.

The Government will ban the sale of new cars with petrol or diesel engines from 2030 as part of a drive to improve air quality.

Without support for the transition, the car industry - which is dominated by production of traditional internal combustion engine vehicles - could be left behind, meaning even more reliance on importing vehicles built in foreign factories and potentially pushing up prices of cars sold here.

It would devastate the automotive industry, which directly employs 180,000 in manufacturing and is responsible for 13pc of all the UK’s goods exports.

Philip Dunne, a Tory MP who is chairman of the committee, said the road to meeting the 2030 ban "could be rocky, with challenges in manufacturing capacity, a skilled workforce and extraction of critical components”.

The inquiry warned that any delays in growing the electric vehicle supply chain could badly undermine the UK's advantages.

Car chiefs including former Jaguar Land Rover boss Sir Ralf Speth and Carlos Tavares, head of Vauxhall owner Stellantis, have both previously spelled out the need for batteries to be manufactured near the car plants that they eventually are used in.

Industry estimates suggest that eight gigafactories would be needed to maintain current UK car production of 1.5m vehicles a year if all models were electric.

Orral Nadjari, chief executive of Britishvolt, the company aiming to build a gigafactory in Northumberland, warned that motorists could face higher costs without domestic battery plants.

He said: “No local battery capacity will potentially see the UK automotive industry move out of the country and closer to where batteries are produced. If this happens then vehicles will potentially need to be imported, causing additional costs for consumers.

"Quite simply, local battery supply is not only essential for UK plc but also net-zero ambitions.”

Margot James, executive chair of WMG at the University of Warwick, a body which researches technology around electric vehicles, said: “Battery production in the UK is vital to the future of the automotive sector and important to employment and economy.

“Our economy would suffer if we saw a decline in our research and development capabilities, especially if the UK was not developing its own battery manufacturing capability."

Batteries account for 40pc of the cost of the average electric vehicle and are extremely heavy and expensive to ship, she said, so car makers are likely to drift towards areas where they are made.

The Faraday Institution, an independent research institute, has calculated that without gigafactories the UK could miss out on 105,000 jobs by 2040.