Britain must build up its electric-vehicle battery industry in the coming years or it will lose out to the European Union in the intensifying race to build plug-in cars, the country’s automotive trade group warned.
The Brexit deal reached on Dec. 24 gives automakers and their suppliers little time to localize production, Mike Hawes, CEO of the Society of Motor Manufacturers and Traders, said in a briefing with reporters.
Battery packs have to have 30 percent of their content sourced from the UK or EU at first to trade tariff free as part of the agreement, and those requirements get stricter starting in 2024.
Hybrid and electric vehicles also will be subject to rules of origin that start out easier relative to combustion cars, taking account a lack of local production of batteries now. But they too will get tougher three years from now.
The requirements put Britain's vehicle plants in a bind, Hawes said. Battery packs are heavy and would be costly to ship from plants in the EU, so it will be key to have factories in the UK feeding car-assembly sites.
For now, Britain's battery making is limited to one site that feeds packs to Nissan Leaf electric hatchbacks in Sunderland, England. The startup Britishvolt announced plans last month to build a factory in northeast England, but the company has released little detail on how it will fund the project.
Established battery manufacturers such as LG Chem and Samsung Electronics as well as startups including Northvolt are planning much more capacity in the coming years elsewhere in Europe. Germany and France are among the national governments committing billions to support the projects.