The UK is aiming to once again become one of the world's top 15 vehicle production locations, following the government's unveiling of a new 10-year industrial strategy that promises significant savings and better trading conditions for manufacturers.
Revealed yesterday, the new industrial strategy provides the foundation for substantial reductions in commercial energy costs, favourable investment conditions, enhanced skills development and improved trading terms for UK-based manufacturers, and the automotive industry aims to use it as a “springboard” for substantial growth.
The Society of Motor Manufacturers and Traders (SMMT), which represents the UK's automotive industry, welcomed the announcement with a new 10-point plan that aims to "build on the foundation" of the industrial strategy to make the country one of the world's top 15 vehicle manufacturing sites by 2030 - delivering a £50 billion boost to the economy in the process.
Included in the SMMT's 10 recommendations are the introduction of new EV purchase incentives for retail buyers, a clear roadmap for bus and HGV decarbonisation, a public charger mandate, a strengthening of the EU-UK trade relationship and the securing of new trade deals with other important global markets.
One of the most important points in the 10-step plan is to "reduce the cost of energy and support manufacturers to remain internationally competitive" – a particularly pertinent initiative given that UK manufacturers currently pay more for electricity than anywhere else in Europe.
Under the framework of the industrial strategy, the government will invest more than £2bn over the next four years to cut energy prices by up to 25% for more than 7000 businesses, including those in the automotive sector. However, it has not yet said exactly which businesses are eligible.
According to the SMMT, a UK vehicle factory currently pays more than double the European average in energy costs, partly due to energy taxes that are six times higher.
The trade body called for "rapid implementation" of the energy cost reform proposition, estimating that it could amount to a 20% reduction in the sector's electricity bill, which would "help to ease this structural disadvantage".
The government has also proposed a relief on standing charges for energy-intensive industries – including battery manufacturing – which, the SMMT argues, should also apply to the wider automotive sector because the shift from ICE to EV powertrains naturally drives up manufacturers' electricity demands.
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