Brexit could hurt UK's electric car industry
Mar 07, 2018 ALANNA PETROFF AND CHARLES RILEY Daniel Shane
Uncertainty over exit from EU delays investments
LONDON (CNNMoney) - The UK risks missing out on the electric car revolution.
Analysts and top industry executives say that uncertainty over the UK's
departure from the European Union has delayed crucial investments in
electric vehicle technology and forced automakers to make alternative plans.
Jaguar Land Rover CEO Ralf Speth added fuel to those worries on Tuesday,
saying he urgently needed clarity on Britain's future trading relationships
before committing his company to making electric cars in its home market.
"We are waiting for these kinds of decisions," he told Reuters. "It goes
without saying because uncertainty is really challenging us very much and
not only us, it's for the complete industry."
"You hardly see inward investment any more or every decision is taking
longer," he added.
Owned by India's Tata, Jaguar Land Rover is the biggest automaker in the UK.
Last week it said it would build its new I-PACE electric vehicle in Austria,
inside the EU's vast free trade area.
BMW, which makes the Mini, announced plans last year to build electric
versions of the iconic British model at a factory in Oxford. But it said
last month that a second production center would be established in China.
Car manufacturers, which rely on complicated supply chains that crisscross
national borders, are worried that Brexit will make it more expensive to do
business in the UK because it will lead to new trade barriers. About 45
percent of the cars made in Britain are exported to the EU.
Prime Minister Theresa May has said relatively little about the issues that
matter most to the auto industry.
"Whether car plants in the UK can export tariff free to the EU will have a
big impact on whether foreign investment will continue to come to make new
cars -- including electric ones -- in the UK," said David Bailey, a
professor of industrial strategy at Aston University.
Any dent in investment in new technologies "would damage the industry's long
term competitiveness," he added. "Some clarity on Brexit is needed soon."
Investment in the UK auto sector fell by 34 percent in 2017 to £1.1 billion
($1.5 billion), according to the Society of Motor Manufacturers and Traders.
The industry supports over 800,000 jobs in Britain.
Industry analysts said it makes sense for companies such as Jaguar Land
Rover to delay new investment until the government provides more certainty.
"It is an entirely logical position," said Tim Urquhart, an auto analyst at
IHS Markit. "It's quite hard to see what else they could do in the
Bailey said that Jaguar Land Rover has a new plant coming online in Slovakia
that could be used to manufacture electric vehicles.
The risk is that the UK will miss out on a major shift in the industry.
China, which is the biggest market for electric vehicles, is making itself
an inescapable destination for global automakers. They have been lining up
recently to announce plans to make their electric cars in the country.
Tesla has said it's working on plans for building its cars in China.
Volkswagen, the world's biggest automaker, has a $12 billion plan to make
electric cars in the country, and Nissan has just announced a major
investment program too.
Experts say others will soon follow.
[© 2018 by CNN NewSource]
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