Amid rising concerns over the impact of the new Brexit trade deal, automotive manufacturers are having to overhaul their supply chains to meet the new ‘rules of origin’ clause. Greg Harris, Global Strategy Lead for Electrification at HORIBA MIRA, explains how this will drive a surge in demand for development and testing of EV battery packs.
Last month, Aston Martin boss and Nissan planning chief Dr Andy Palmer issued a warning to the UK government that the Brexit trade deal, alongside ambitious plans to ban the sale of new petrol and diesel cars by 2030, presents a risk of “crippling tariffs” for the UK automotive industry unless the sector invests heavily in domestic battery production for electric vehicles.
This is mainly due to the ‘rules of origin’ terms negotiated under the UK-EU deal, which stipulates that, by 2026, at least 55 per cent of the car's value must be derived from either the UK or the EU, or face substantial tariffs significantly increasing the cost of the finished vehicle when exported.
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To meet this new standard, OEMs are working hard to reinvent their supply chains. Yet, having worked with a number of automakers around the world on their EV battery development and testing, at HORIBA MIRA we believe testing and validation needs to be a more urgent priority.
This is because OEMs looking to meet the new ‘rules of origin’ clause will be sourcing as much as they can from the UK. And to implement these changes into the supply chain will require extensive development and testing, with EV battery packs being a major focus due to the high value of those components.
A major part of making this shift post-Brexit is the requirement for investment into R&D and the infrastructure for EV battery development and production. Pioneering initiatives such as the UK Battery Industrialisation Centre in Coventry are going to be key to success.
As are firms such as HORIBA MIRA, which, responding to soaring demand for advanced battery safety testing, recently invested £1.5m in a new Large Climatic Vibration Laboratory – or ‘shaker’– and a Battery Abuse Facility.
Our investment in the UK’s first battery vibration test facility is just one example of creating much-needed test infrastructure, so that instead of looking to Europe, China and further afield, British automakers can stay in the fast lane for EV production in what promises to be a lucrative market.
What’s more, the UK currently faces a ‘unique opportunity’ to create a world-class battery production supply chain, and is well-placed to expand its existing R&D, infrastructure and manufacturing capabilities in order to become a world leader in battery production.
Understandably, automakers and the industry are concerned about what impact the new ‘rules of origin’ terms will have on their supply chains and profitability. The good news is that the UK is one of the most promising places to create and build a world-class battery production sector and has already built significant expertise in this area.
A great example of this is the recent investment by BritishVolt, not only to build a new £2.6bn gigafactory in Blyth, but also to site its new global headquarters at our MIRA Technology Park in Nuneaton. This highlights the unique opportunity to create localised production.
However, to truly achieve this – not only does it require quick and strategic action by OEMs and their suppliers, but a collaborative approach on all fronts. The whole ecosystem for developing EVs in the UK has changed, and only through investment and acceleration of R&D, academia, infrastructure to design, test and validate batteries, as well as an overhaul of the supply chain can we make the UK competitive in the EV market.
The coming years will hopefully spur a hotbed of innovation and technological advances in this area and we hope to play a major role in this. HORIBA MIRA specialises in developing batteries for niche applications and provides OEMs and Tier 1s with a comprehensive in-house design, development, build and test solution for battery systems. The firm’s Battery Test Management Solution (BTMS) manages the complete testing programme including all logistics.
Greg Harris, Global Strategy Lead for Electrification at HORIBA MIRA
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