LONDON – July 5, 2023 – Representatives from major industry players such as DHL Supply Chain, Alexander Dennis, and Volvo Trucks have appealed to all political parties to provide support for the UK automotive supply chain in scaling up the electric vehicle (EV) sector. At the annual Society of Motor Manufacturers and Traders (SMMT) conference which was held in London on 27th of June 2023, they emphasized the need for a competitive and attractive investment environment to ensure the industry’s success.
The industry representatives expressed concerns about the impending Rules of Origin tariffs resulting from the UK-EU trade deal, which could disadvantage British-built and supplied EVs in the export market. They called for urgent action, urging political parties to utilize all available policy tools and regulatory measures to make the UK the most desirable investment destination.
Mike Hawes, CEO of SMMT, emphasized the potential £106 billion prize in the UK battery electric vehicle (BEV) production market, which is expected to increase tenfold by 2030. However, Hawes stressed that this growth is contingent on a competitive business environment. He suggested a delay in implementing the rules of origin until 2027 to support the industry and its supply chain, but the decision lies with the European Commission.
The industry’s concerns align with previous warnings from carmakers like Stellantis, who highlighted that the rules of origin implementation would put the UK automotive sector at a significant disadvantage compared to Asian imports and lead to increased logistics costs.
Simon Villanueva, legal director for Europe South Sales at Volvo Trucks, mentioned the ever-changing challenges in the UK supply chain, with issues arising in component supply, such as the recent chip shortage and difficulties with finding painters. While improvements are being observed further down the supply chain, challenges persist.
The industry is now requesting the UK government to commit to five key pledges, including a green automotive transformation strategy, achieving net-zero mobility, developing green skills, positioning the supply chain as a core element of the UK’s trade policy, and implementing energy and investment measures to support zero-emission vehicle production.
Kemi Badenoch, Secretary of State for Business, Energy and Industrial Strategy, acknowledged the Inflation Reduction Act and subsidies in the United States but clarified that the UK government would not simply replicate the US strategy. She emphasized the need to tailor the approach to the UK’s unique advantages, promising to unveil a long-term plan for the EV transition in the UK supply chain in the coming month, focusing on affordability and practicality.
The demands put forth by the UK automotive supply chain highlight the sector’s urgency in securing support and creating an environment conducive to the growth and competitiveness of the EV industry. With the imminent transition to electric vehicles, collaboration between industry and government is crucial to ensure a successful and sustainable transition for the UK automotive supply chain.