How Britain's electric car revolution took a wrong turn

How Britain’s electric car revolution took a wrong turn

“We recently launched our first home battery, and although we are excited about the product, we would have preferred to source the battery cells from the UK if that had been an option,” he said.

He estimates that Britain can only produce 50,000 car batteries a year, not even a tenth of what will be needed.

Hawes at SMMT argues that the UK car industry has “fundamental strengths” but that changes are needed to ensure it does not fall victim to more nimble rivals.

“It can and will be rebuilt,” he adds. “However, the UK Government – like others with whom we compete – must take action to ensure that the UK remains a competitive destination for inward investment.”

Extra controls on exports to the EU – the UK car industry’s biggest market – have inevitably added time and pressure.

The UK car industry has a 0pc tariff deal with the EU, but there is still plenty of paperwork that didn’t exist before the UK left the union, says Ian Foley, founder of electric bus manufacturer Equipmake. These small differences can mean that foreign investors are put off from the UK.

Cracking the gigafactory riddle

Palmer, who is known as the “godfather of electric vehicles” for his work launching Nissan’s electric Leaf, can vividly remember being woken up at 3am by former business secretary Lord Mandelson 12 years ago when he was still a boss based in Japan .

Nissan needed to decide where to locate a battery plant for the Leaf – seen at the time as an ambitious gamble – and Mandelson had been eyed by Palmer’s choice of Portugal over the UK.

“I’ve heard you’re going to make the decision to go to Portugal, I want you to change your mind,” the Labor minister told Palmer.

Palmer replied that the Portuguese had won fairly, and offered better incentives to the company, but Mandelson requested that he wait 24 hours anyway.

“He then came back with the goods – and that’s why the battery factory in Sunderland exists today,” says Palmer.

“And once you have a factory, it’s easier to expand it.”

Today, ministers need to be just as proactive to ensure the UK gets its share of the electric car market, he says.

“You look across the channel, and the EU has made battery manufacturing a project of strategic priority,” says Palmer.

“It’s a chicken and egg situation. For example, if I want to build a battery factory in the UK, I probably want to secure Jaguar Land Rover as a customer.

“JLR also probably wants to be close to a battery manufacturer, otherwise it will decide to go somewhere like Slovakia. That’s where you need to step in.”

Palmer, who is chairman of battery maker InoBat, says his own company is currently choosing between Spain and Britain as possible sites for a gigafactory – but Madrid is working harder to woo him.

“From an emotional point of view, I would love to see Britain win, but I have to represent my shareholders,” he says.

Foley agrees. “One thing that worries me is that if you look at the commitment from other countries, regions, to things like battery manufacturing, it’s orders of magnitude greater than the UK,” he says.

If the government won’t budge, some believe the rules should be adjusted to allow pension funds to invest in the nascent sector. Even a tiny fraction of the £114.6bn pension savers took out last year could make a difference, but current restrictions mean UK funds have to be far more cautious than their US counterparts.

“Fundamentally, in Britain the people who run mutual funds are more conservative than in America,” says Foley.

If the UK can crack the gigafactory conundrum, it can tap into the major strengths already here.

“The UK is renowned for its outstanding creativity and innovation,” said Hayaatun Sillemchief, CEO of the Royal Academy of Engineering.

Industry figures say this is borne out by the wealth of motorsport companies based here, such as McLaren, Williams, Aston Martin, as well as the Mercedes, Alpine and Haas racing teams.

But, Sillem adds, the country needs to get better at taking that innovation and successfully commercializing it into businesses that generate manufacturing, jobs and wealth. She, too, cites shyness with investment money and the lack of government assistance as problems holding the industry back.

“We need to have a clear partnership between the government and business,” she says.

Palmer says Britain still has a chance to turn things around, but adds: “To be honest, we’re coming very late to the party. We’d better move on if we think we’re going to save the car industry.”

After his 150th phone call, Britishvolt’s Rolton managed to secure a last-minute lifeline for his company from Glencore, the mining and commodities giant.

The cash injection – which is accompanied by cost-cutting measures such as voluntary pay cuts promised by staff – will keep the business going for the time being. Ultimately, says Rolton, either his business succeeds or someone else has to if the UK car industry is to survive.

“Batteries come to cars or cars go to batteries,” says Rolton. “We still don’t seem to quite understand it yet.”

For now, Britisvolt’s dream of driving the electric car revolution is working on borrowed time. Like the UK car industry at large, time is running out to save it.

A government spokesman said: “The UK is one of the best places in the world for car manufacturing and we remain dedicated to securing gigafactories across the country.

“Our success is testament to the huge investment Nissan has recently made in their new facility in Sunderland, and we will build on this through a major investment program to electrify our supply chain and create jobs.

“Support to Britishvolt through the Automotive Transformation Fund was always conditional on the company achieving certain pre-agreed milestones to protect taxpayers’ money.”

In the case of Thatcher in the 1970s, the task of balancing taxpayer exposure with protecting a vital industry is a challenging one.

But unless the country can get it right, Britain risks the sun setting on its electric car ambitions.

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