Looks like Brexit has created a new problem for the UK auto industry.
UK car manufacturers breathed a huge sigh of relief last year when the UK and EU finally reached a Brexit trade deal. A no-deal Brexit would have been disastrous, forcing UK carmakers to pay steep tariffs on parts imported parts and cars sold in Europe.
Brexit has also had some surprising benefits, as UK drivers caught by speed cameras in Europe won't have to pay any speeding fines. But while the deal is a cause for celebration for the UK auto industry, former Aston Martin boss Dr. Andy Palmer, who oversaw the launch of the DBX SUV, fears there could be consequences later down the line as the UK prepares to ban the sale of new combustion-powered cars in 2030.
As part of the UK and EU trade deal, "rules of origin" will require batteries for electric vehicles to only contain 50 percent of components sourced from outside the EU. If this is not achieved, UK car manufacturers could face substantial tariffs, increasing the cost of the vehicle when it gets exported. To prevent this, Autocar reports that Palmer has sent an open letter to the Prime Minister Boris Johnson and Secretary of State for Business, Energy and Industrial Strategy Kwasi Kwarteng urging for new gigafactories to be built in the UK to preserve its car industry. The message is clear: build batteries or the UK car industry could collapse. Without UK-sourced batteries, Palmer fears the Brexit trade deal will result in "crippling tariffs."
"Without electric vehicle batteries made in the UK, the country's auto industry risks becoming an antiquated relic and overtaken by China, Japan, America and Europe", Palmer wrote, adding that the 800,000 jobs in the UK's auto industry is at risk without well-established battery production.
"Business sense dictates that the automotive industry will move to where the batteries are, and we are facing a tight race against the clock. Leaving the European Union provides us with opportunities to compete in the industries of the future. Yet as things stand, France, Germany and the wider EU are showing their intent by making massive investments in factories that produce batteries and electric vehicle components."
Startup company Britishvolt has already proposed to build a gigafactory in Blyth, Northumberland, but Palmer thinks a lot more needs to be done to ensure the UK car industry's survival. "I am urging you to establish a 'Gigafactory Taskforce' with the express purpose of identifying an achievable and ambitious plan that allows the UK to build the gigafactories needed in the next five years," Palmer wrote. "Time is of the essence - and the British auto industry depends on it."