The Guardian view on the UK car industry: facing a green moment of truth
Over recent decades, Britain’s economy has become steadily more service-based. But as the opening ceremony of Birmingham’s Commonwealth Games powerfully illustrated, industry still occupies pride of place in the imagination of regions such as the West Midlands. At the Alexander stadium, Jaguars, Minis and Rovers of various vintages were showcased to the world – the past and present of a car manufacturing sector that provides well-paid, skilled jobs, and defines a local sense of identity.
The future, though, has never looked more insecure. In the short term, a combination of the pandemic and Russia’s war in Ukraine has created a supply chain crisis that has led to an output slump and drop in sales. In July, car sales in the UK fell by 9%. Falling living standards, prolonged recession and high inflation will add to the industry’s problems by hitting demand. This perfect storm is challenging enough. But the longer-term question facing the UK car industry is existential: as the world leaves the internal combustion engine behind and moves to battery electric vehicles, is Britain going to remain a mass car producer or not?
Even as domestic demand for electric cars rises, the UK is in danger of falling irrevocably behind in the race to build battery manufacturing capacity – probably the crucial factor in determining the location of future car-producing hubs. In the rest of Europe, 35 battery gigafactories will be up and running by 2035 – the date from which the sale of new diesel and petrol cars will be banned. The European Union has provided €6bn worth of financial incentives to turbocharge this process. National governments are also lavishly betting on the future. Germany, for example, where Elon Musk’s Tesla has built a
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