MPs call to incentivise EV battery supply chain investment

The UK Government is falling behind competitors and needs to urgently create an attractive environment for electric vehicle (EV) battery production in the UK, according to a report by the Business and Trade Committee.

The MPs report, called Batteries for electric vehicles, warns the UK faces a huge ‘gigafactory gap’, with less battery production capacity than needed for the nation’s future needs.

If not addressed, this could see automotive production in the UK decline, potentially putting hundreds of thousands of associated jobs at risk, it said.

The report argues that the UK could become an important centre for ‘midstream’ refining processes for critical materials such as lithium. Doing so would establish the country as a frontrunner in building sustainable and ethical batteries, compared with those from China and European countries.

The Government informed the Committee that it plans to publish an Advanced Manufacturing Plan and are working on a UK Battery Strategy. The UK’s comparative advantage in clean energy and new battery technology should be leveraged in these plans, the report concluded.  

Other recommendations included better Government backing for agreements to set up new gigafactories, prioritising them for infrastructure improvements, and boosting support for domestic critical mineral mining.

Liam Byrne, Chair of the Business and Trade Committee, said: “The UK is on course to secure barely half of the electric battery capacity needed by the domestic car industry alone. Unless we fix this fast, we risk the industry simply relocating to Europe or the US, or becoming reliant on imports from China and elsewhere. That imperils 160,000 jobs and a jewel in the UK’s industrial crown. Now is the time to act.

“We are unlikely to be able to compete with Brussels, Bideonomics or Bejing when it comes to subsidies. But we can still take decisive action. We desperately need a 10-year strategy that boosts subsidies, creates secure access to low-cost power, designates key sites for gigafactories, fixes the skills gap, delivers tariff-free trade, de-risks access to critical minerals and offers long-term R&D for the industry.

“Government must cultivate a more appealing investment environment for battery producers before it’s too late. We must act urgently if we are to safeguard British automotive jobs and secure this critical industry for the future.”

Image from Shutterstock

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