Image Source: Bloomberg
Car production in the U.K. fell sharply last year, reaching its lowest level since 1956.
Car production in the UK last year is 10% less than the year before, which was the lowest number ever.
Society of Motor Manufacturers and Traders, a business group, said that the lack of semiconductor chips around the world was slowing down production lines.
But car companies are worried that the U.K. needs to do more to make it a more competitive place to invest in manufacturing.
The government said it was “determined” to keep the country as one of the best places in the world for making cars.
Manufacturers hope to start making a million cars again by 2025, but they would have to spend a lot of money and hire new workers to get back to where they were before the pandemic.
When it comes to giving manufacturers state aid, companies worry that the U.K. needs to catch up to the U.S. and the E.U.
The Inflation Reduction Act, a major piece of U.S. law, will give billions of dollars in subsidies to car companies that build supply chains for electric vehicles in the U.S.
Mike Hawes, in charge of the SMMT, said this would “suck up” a lot of foreign investment.
The E.U. is angry and is thinking about how to get back at the U.S. by either directly loosening rules on state aid or doing so under the guise of extending programs to help Covid recover or boost green technology.
One reason to leave the E.U. was to get out from under rules that limited how much help governments could give to their favorite industries.
Mr. Hawes said that the U.K. might not be able to help essential industries as much as it did before it left the E.U.
The SMMT said that the closing of Honda’s factory in Swindon in July 2021 and the end of Vauxhall Astra production at Ellesmere Port in April 2022 affected the numbers.
Mr. Hawes said that the numbers showed how “hard” it was for the U.K. to make cars in 2022, even though the country made more electric cars than ever before.
The numbers also showed that the country made a record number of electric cars last year, with almost a third of them being fully electric or hybrids.
The SMMT said that exports of these cars would bring in £10 billion.
But the number of cars exported in 2021 was 14% less than in 2021. So there needed to be more to make up for the 9.4% rise in the number of cars sold in the U.K., where about one in ten cars were sold.
Last week, a new battery company called Britishvolt went out of business. This set back the car production in the U.K. even more.
The company wanted to build a huge factory in Blyth, Northumberland, to make batteries for electric cars. But it was hard to make money, and ran out of cash.
The £3.8 billion factory in Blyth was part of a long-term plan to make the U.K. a better place to make batteries for electric vehicles, create 3,000 skilled jobs and increase car production.
At the moment, there is only one battery plant in the U.K. that China owns. In Sunderland, it is right next to the Nissan factory. However, 35 plants are planned or are already being built in the European Union.
A government spokesperson said that the U.K. would continue to be one of the best places in the world for car production.
Car production in the UK affected by Britishvolt’s insolvency
U.K. battery start-up Most of the 232 people who worked at Britishvolt lost their jobs immediately after the company went bankrupt.
On Tuesday morning, the employees heard the news at an all-staff meeting.
The company wanted to build a huge factory to make batteries for electric cars in Blyth, Northumberland.
Ministers had called it an opportunity to “level up” that would help the region’s economy and the future of car production in the U.K.
But Britishvolt had trouble making money and ran out of money. On Monday, its board may have decided that there needed to be better offered to save the business.
The £3.8 billion factory in Blyth was part of a long-term plan to make the U.K. a better place to make batteries for electric vehicles and create 3,000 skilled jobs.
Government ministers supported the project because the area is one of the main “red wall” seats that will switch from Labour to the Conservatives in the 2019 General Election.
At the moment, there is only one battery plant in the U.K. that China owns. However, in Sunderland, it is right next to the Nissan factory. In the European Union, 35 plants are either being built or are in the planning stages.
Read Also: Britishvolt seeks bid to stave off collapse
Industry experts have said that the U.K. would need several battery factories to support the future of U.K. car production gasoline and diesel engines are phased out over the next ten years.
Britishvolt also planned to open a new place where batteries would be made.
At the end of last year, the ambitious but financially troubled new company almost went out of business. However, one of its investors, the commodity trading giant Glencore, saved it.
Last year, Britishvolt asked the government for £30 million of the £100 million promised to help. The government said no because the company had not reached the agreed-upon construction milestones to get the money.
But business people and government officials are still sure that this plant will be built, no matter who owns it.