Not investing in UK electric car battery production could cost jobs, study says

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The UK auto industry risks losing out to Europe in the race to create significant battery factories that are important to the sector’s future, putting jobs at risk throughout the country, a government-backed research body has cautioned.

A failure to attract so-called gigafactories for making batteries for electric cars could cost the UK 105,000 jobs by 2040, a research by the Faraday Institution show.

Automakers around the world are racing to shift production from internal combustion engines towards electric vehicles with zero exhaust emissions, amid rising limits on carbon dioxide output and the threat of outright prohibitions that could take place as early as 2032 in the UK.

Chinese firms are the major providers of lithium ion batteries to European production, but automakers are looking to produce their own closer to their plants, indicating that billions of pounds of investments are up for grabs, with many UK plants competing directly against their counterparts in France, Germany and Italy.

“Over time, car production will move to where the battery production is,” stated Neil Morris, the Faraday Institution’s chief executive. “We’re at or near the fork in the road.”

If the UK were to construct enough batteries to replace fossil fuel car production, direct employment in the auto industry could rebound from about 170,000 jobs in 2020 to about 220,000 in 2040.

A worst-case result with no large-scale UK battery production could result in domestic vehicle producers to gradually decrease their production of internal combustion engine vehicles, progressively terminating the jobs of the 170,000 people directly employed in the UK automotive sector, Faraday’s report added.

France and Germany have declared plans for up to €6 billion ($6.71 billion) of investments in battery production, as they look forward to secure employment for millions of workers in their automotive industries.

The European commission has also authorized a separate plan by Belgium, Finland, France, Germany, Italy, Poland and Sweden to invest €3.2 billion ($3.58 billion) into starting a European battery industry.

The continued uncertainty regarding Brexit negotiations has complicated the British government’s attempts to secure private investment in a gigafactory.

Regardless of the decline of its homegrown industry, the country has managed to carve out a position as the fourth-largest car manufacturer in Europe. However, all of the UK’s large factories are owned by foreign automakers, many of whom have been avoiding any further investments until the long-term trading relationship with the EU is decided.

The UK’s departure from the EU was conceived by industry insiders to be a reason behind Honda’s decision to close its Swindon factory, and also Nissan’s refusal to build its X-Trail SUV in Sunderland. However, Honda denied such views and said that their decision had nothing to do with Brexit.

Elon Musk, the CEO of Tesla, stated in November that uncertainty regarding the Brexit process was a major reason for the US electric automaker’s choice of Berlin for its first European gigafactory, instead of a UK location.

The Society of Motor Manufacturers & Traders (SMMT), which represents UK automakers, has also said that the industry needs further investment.

“As the global transition to zero-emission transport gathers pace, we must make sure the UK remains an attractive place to design, build and sell electric vehicles,” the SMMT stated. “We already make some of the bestselling electric cars and taxis, but to preserve our manufacturing competitiveness and safeguard jobs for the future demands major supply chain investment – securing large-scale battery manufacturing capability will be essential to driving this.”

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