Aston University’s Centre for Business Prosperity has issued a stark warning about the potential for the UK automotive industry to lag behind in the global electric vehicle (EV) revolution.
In their recent report titled ‘Powering the Future: Aligning Economic Policy for Automotive Sector Resilience in the face of Critical Material Challenges,’ researchers emphasise the need for immediate policy intervention to ensure the continued strength of the UK automotive industry.
UK’s vulnerabilities in the EV transition
According to the findings by Professor Jun Du and Dr Oleksandr Shepotylo, the UK automotive sector currently finds itself in a precarious position regarding the EV revolution.
The report highlights the country’s vulnerability due to a critical dependency on battery imports, surpassing exports by 10.5 times.
While Germany leads in the value of EV exports, and China leads in the number of EVs exported globally, the UK risks being left behind if prompt action is not taken.
The automotive sector in the UK faces multifaceted challenges arising from technological advancements, socioeconomic transformations, and geopolitical intricacies, as outlined in the report.
The UK’s departure from the EU further complicates matters, with challenges in navigating non-tariff measures and rules of origin affecting EV exports.
In the midst of intensified global competition and industrial policies on a global scale, the need for agile and responsive economic policies becomes evident.
Dr Shepotylo added: “The report also shines a light on the level of Government intervention in the EU, US and China, as all have coherent industrial strategies that capitalise on the shift to Net Zero, whilst the UK does not, favouring a reactive sticking plaster approach, such as the short term extension of Rules of Origin deadline with the EU.
“Whilst this provides respite to the UK the risk is that the gap with its competitors widens.”
Four-point plan for UK automotive sector resilience
In response to these challenges, the report proposes a comprehensive four-point plan aimed at fortifying the UK’s position in the global EV market.
The roadmap includes strategic recommendations targeting global opportunities in the EV revolution, optimisation of trade policy, strategic investments in EV battery production, a future-ready industrial strategy, and continuous monitoring of global value chains.
Jun Du explained: “Cultivating a resilient and competitive UK automotive industry demands policy ideas that align with the ever-evolving dynamics of the global electric vehicle market.
“Our research highlights the weakness of the UK’s current position and outlines the strategic interventions urgently needed to fortify the UK’s interests and navigate the transformative landscape of the electric vehicle revolution.
“The implementation of these recommendations can effectively cement the UK’s leadership position in the realm of electric mobility, ensuring enduring growth, competitiveness, and innovation.”
Warning of continued raw material dependency
The report concludes with a cautionary note, highlighting the risk of the UK maintaining a critical dependency on battery imports while its EU competitors are actively reducing such risks.
With the EV revolution progressing rapidly, the urgency for decisive action and the implementation of the proposed roadmap is emphasised to prevent the UK from being left behind in this transformative global industry.
