Shoring up the UK's low carbon car industry

Whilst much has been written over the past few days about Margaret Thatcher’s devastating impact on many areas of UK industry, it’s arguable that the automotive sector’s current buoyancy owes at least something to her government’s policy of allowing British-owned car firms to pass into foreign hands.

With exports at a record high and production levels poised to hit volumes last seen in the 1970s, it’s hard to argue with the fact that the UK automotive sector is in surprisingly rude health.

Indeed, according to the industry’s trade body the SMMT, the sector now accounts for 1 in 40 British jobs, a nice statistic to present to anyone who thinks we don’t make anything any more.

What’s more, Britain is at the heart of the rapidly growing low carbon vehicle industry. And with the likes of Nissan and Toyota choosing the UK over other European destinations, it’s clearly viewed as an attractive base for low-carbon technology production by some of the biggest overseas manufacturers.

There’s no doubt that it’s a good position to be in. But a report published this week by centre-left think-tank the Institute for Public Policy Research (IPPR) warns that the UK risks squandering its promising position in this key sector unless swift action is taken on a number of fronts.

Remaining at the forefront of the Ultra Low Emissions Vehicle (ULEV) industry is, argues the IPPR’s “Leading the Charge”  report, key to the future of Britain’s automotive sector in general. 

The authors call for a number of measures to stimulate growth in the sector, including improving access to finance for firms in the automotive supply chain, changes to education policy to support the sector’s skills requirements, and the establishment of an advanced propulsion centre - a kind of Powertrain catapult - to ensure that the UK makes the most of its research in this area.

All of this will help, but perhaps the biggest problem identified by the report is the worrying state of our domestic market for low carbon vehicles. We currently lag behind much of Europe and the US in terms of the number of new registrations and the absence of a healthy domestic market threatens to make Britain less attractive for overseas manufacturers.

Again the report makes a number of pretty sensible policy recommendations designed to help address this complex problem. It calls for a concerted approach to developing a national charging network for electric vehicles, it argues for a coherent nation-wide approach to user incentive schemes such as the introduction of a “Green badge” scheme that could for instance, enable drivers, to use toll- roads for free. And it also calls on government, itself a major customer of the automotive industry, to drive procurement of green vehicles.

But perhaps the biggest challenge the sector faces is scepticism over whether low carbon vehicles can actually contribute to a meaningful reduction in emissions. And until the UK’s energy supply is decarbonised the answer to that question - and the rallying cry of many a low carbon vehicle sceptic - is ‘not really’. The Engineer has long-argued that this is no reason not to develop the technology. Decarbonisation of our energy supplies will come. It has to. And when it does, the industrial and consumer benefits of low carbon vehicles will be magnified. But there’s little doubt that the current chicken-and-egg scenario with regards to our energy supply doesn’t do the sector any favours.

The UK automotive sector has done pretty well on its own over the past few decades, but it’s perhaps now up to government to do everything it can to stimulate the growth of the our domestic low carbon vehicle market before the gaze of global manufacturers shifts to more attractive markets elsewhere.