Yahoo Finance Car industry ‘in trouble’ unless Britain builds battery factories, warns Vauxhall chief
The future of Britain’s car industry will be under threat unless the country urgently builds battery factories to feed its car plants, the chief executive of Vauxhall-owner Stellantis has warned.
In comments that will spark worry for workers at its factories in Ellesmere Port and Luton, Stellantis chief Carlos Tavares said: “I fear that if you don't have the battery supply in the UK, for the UK, the market will be in trouble.”
British car production has already fallen to its lowest level since 1956 after an extended period of disruption from Covid-19 and trouble sourcing key parts.
The auto industry is hoping for a bounce back this year but Mr Tavares warned that the industry will find it tough to cope with the transition to electric unless it can urgently attract investment in battery manufacturing.
“The big problem of the UK is to keep a size of market that would support the investments [in] battery supply,” he said.
The shrinking industry has found it increasingly difficult to attract investment to fund construction of so-called “gigafactories”, Mr Tavares said.
Britishvolt, a start-up hoping to build a manufacturing site in Blyth, collapsed without a saviour last month and so far only Nissan in Sunderland has a dedicated UK-based supply of batteries.
Stellantis makes vans in Britain under its Vauxhall, Fiat, Peugeot and Citroen brands and can import batteries from Europe. However, Mr Tavares said production of electric models here will become increasingly precarious without local supply.
BMW-owned Mini has already announced plans to produce its electric models in China, where batteries are easier to come by, rather than at its factory in Oxford.
Jaguar Land Rover makes its electric Jaguar I-Pace in Austria. So far the company has yet to unveil a plan for long-term supply of batteries as it electrifies more models.
Mr Tavares' warning follows similar complaints from Nissan earlier this month. Ashwani Gupta, the Japanese company’s chief operating officer, said earlier this month that the car company needs a secure supply of British-made parts in order for the market to remain attractive.
Mr Gupta said: “The UK is becoming more and more challenging as a manufacturing footprint.”
Manufacturers require a large amount of parts to be made locally in order to make cars that are competitively priced. Without local supply, shipping costs and supply problems drive up costs and can make it more economical to manufacture elsewhere. Local supply chains are considered even more important for electric cars, where batteries are the priciest single component.
The UK’s three biggest car makers after Nissan all currently import batteries.
Mr Tavares’ comments about British manufacturing came as his company unveiled record earnings, helped by a 41pc jump in electric car sales.
Revenue at Stellantis, which also owns Opel, Jeep and Chrysler, rose 18pc to €179.6bn (£158bn), while profit rose 26pc to €16.8bn.
