New sales guides from Germany and France reveal UK car manufacturers may be at risk if they don’t adapt their businesses to meet demand for electric vehicles (EV) in key export markets.
According to analysis from Energy and Climate Intelligence Unit (ECIU), more than 40% of new cars sold in France, and one in three in Germany, were EVs last month.
With 78% of UK cars exported, the EU is the biggest market for UK-made cars, and failure to meet demand could see as much as 163,000 jobs lost across the UK economy, including 127,000 directly in and supported by the car industry and its supply chains – with the West Midlands and the North East particularly vulnerable.
The ECIU’s report finds that a rapid transition to EVs at UK car plants could see UK manufacturers “potentially able to grow their market share in key export destinations if they act decisively to adapt their businesses towards growing EV demand now”.
It comes as an announcement following the UK Government’s consultation on the future of the ZEV Mandate, which closed in October, is expected imminently. Reports suggest it may be further weakened to around 50 or 60% of new cars being EVs by 2030 rather than the current level of 80%.
The ECIU analysis finds that under a scenario where carmakers fail to switch enough of their production to EVs, in addition to job losses, the economic contribution (GVA) of UK car manufacturing would be £70bn lower over the next decade.
If the UK was to transition quickly to EVs though, an additional 182,000 jobs could be created – a difference of 345,000 compared to the worst case – of which 142,000 would be in and supported by the industry and its supply chains, generating an additional £87bn in economic contribution.
Conversely, EU demand for petrol and diesel cars is expected to fall by over 70% over the next decade.
Matt Elliott, Lead Economic Analyst at the Energy and Climate Intelligence Unit, said:
“We lost our car industry before by failing to move with the times and technologies. History is at risk of repeating itself, with customers in our main export markets increasingly likely to choose an EV for their next car, while at the same time some UK carmakers are still calling for a slowdown of UK ambition on EVs.
“Let’s be very clear, with the vast majority of cars made in the UK being exported, the UK’s ZEV Mandate has very little to do with UK factories and jobs. Nevertheless, with EV sales going in one direction globally, the real risk is that UK-based manufacturers remain too slow to grasp the EV shift that is underway in many of their key markets.
“Relaxing EV sales targets would not only signal the opposite of the Prime Minister’s stated aim of green reindustrialisation, it would also likely leave British families less of a choice of low-cost EVs as is already available in other countries.”
Vicky Edmonds, CEO of EVA England, said:
“More drivers are discovering that switching to an electric vehicle usually means lower running costs and less exposure to the rollercoaster of oil and petrol prices – something we saw last month with diesel hitting £2 a litre in the UK. As more new EVs enter the market, more affordable second-hand options also become available, helping growing numbers of British drivers access the benefits.
“For British car manufacturing, this global EV sales surge is an opportunity: the stronger global demand for EVs becomes, the bigger the potential win for the industries and workers that make them. Supporting drivers to switch to EVs and supporting UK industry to compete in that growing global market are two sides of the same coin.”
Image courtesy of Green Car Guide
