SMMT calls for more gigafactories to boost UK auto industry

The UK's Society of Motor Manufacturers and Traders (SMMT) called for the government to commit to build 60 GWh of gigafactory capacity by 2030 to boost the country's automotive industry, in a report that was released on June 29.

In its 'Full Throttle: Driving UK Automotive Competitiveness' report, the SMMT said that the shift to electrified vehicles was the biggest challenge facing the auto sector.

The SMMT said the UK government was already working with the industry to attract additional battery manufacturing, but a binding target of 60GWh of battery capacity needed to be built by 2030.

"These gigafactories would give British manufacturers the capability to produce up to one million electric vehicles a year and ensure tariff-free access to critical markets in the EU," the SMMT said.

The UK government had previously pledged to ban the sale of new gasoline and diesel cars by 2030.

S&P Global Platts reported in June that the government was in talks with six companies about building gigafactories to meet future EV demand.

Currently, only Britishvolt has firm plans to build a 30GWh/year gigaplant in Blythe, Northumberland, while the Coventry City Council is proposing to use a 265-acre site at Coventry Airport, which is near a number of automakers, to build a gigafactory, with a planning application due to be submitted in the coming months.

Nissan already operates a 1.9GWh/year plant in the region.

'Build back better fund'

Under its Full Throttle strategy, the SMMT also called for a new 'Build Back Better Fund' from the government to support industry transformation.

It said this would not just be focused on the automotive industry, but across other manufacturing sectors, to revolutionize production lines and overcome some of the areas where the UK lags in cost competitiveness or strategic support.

"Most importantly, the fund will help the sector transition to net zero and transform our existing manufacturing and supply chain," it said.

The strategy also set out policy proposals aimed at increasing the automotive industry's competitiveness in the transition to net-zero.

The technology and innovation policies included supporting the development of a 2GWh fuel cell gigafactory, the roll out of a comprehensive and long-term skills strategy and committing to the UK becoming a leader in developing, testing, trialing and deploying connected and automated vehicle technology.

The policy proposals related to manufacturing competitiveness include the Build Back Better Fund, as well as allowing net-zero critical industries to access the same benefits and compensation schemes as energy intensive industries and get more support within the UK Emission Trading Scheme (ETS). Other proposals include fund trial and demonstration projects to explore the use of hydrogen during manufacturing; and ensure the UK tax system positions the country as an attractive destination for global investment.

The SMMT also proposed to ensure that at least 2.3 million public charging points are in place by 2030 and commission an independent review to consider the long-term future of fuel duty and CO2 based taxes. It also asked for policies that allow the extension of plug-in vehicle incentives beyond their current term and exempt ultra low emission vehicles from taxation for the next five years; and work with the industry to develop an ambitious, forward-looking trade strategy.

The SMMT said that these proposals would set the UK on course for growth and improve innovation and without it the auto industry risked falling behind, with declining production, job losses and economic damage to the automotive and its dependent sectors.

"The pace of technological change is accelerating and the competition is more ferocious. If we are to secure vehicle manufacturing in this country, with all the benefits to society that it brings, decisions need to be made today," SMMT CEO Mike Hawes said at the June 29 automotive industry annual summit.