Demand for electric vehicles soars as battery production falters
The electric vehicle, or EV, has seen historic demand in recent years, as the automotive industry steps up its slow transition from internal combustion engines (ICES) to the zero-carbon alternative. Unprecedented demand has been driven by an increase in visibility for the climate crisis and sustainability issues, as well as the introduction of viable and practical electric vehicles to the mainstream market.
But production of EVs has been threatened as a direct result of demand, as battery production struggles to keep up and the British government falls behind on significant plans to place the UK at the centre of battery production. As EVs threaten current sales of ICE vehicles, the 2030 ban on the sale of new ICE vehicles looms ever-closer – leading to existential discussions about the UK’s EV industry and its crucial jobs.
Government plans and gigafactories
The UK government had unveiled plans to build a battery industry in Britain, proposing to invest £100 million in taxpayer funds to the completion of a ‘gigafactory’ in the North East. But plans have been overshadowed by recent figures, published by Benchmark Mineral Intelligence, regarding the supply of crucial materials and their effect on battery supply in the UK. According to the mineral authority, the UK needs to step up its acquisition of lithium and cobalt nearly one-hundredfold in order to meet eventual demand for the new mode of transport.
Impact on industry
As global battery production steps up, and various private enterprises set out their own ambitions for the lucrative market, the UK’s potential failure to establish a viable industry on its own soil could spell disaster for the automotive industry. Skilled workers in ICE production are predicted to be laid off in tens of thousands as engines become no longer viable for commercial sale. Without job uptake in the battery production industry, the Faraday Institution predicts that 114,000 UK automotive jobs could disappear by 2040.
The news puts especial pressure on the UK government to fast-track the acquisition of materials and construction of proposed gigafactories, but without substantial intervention, significant questions remain regarding the viability of the manufacture industry in the UK.
Impact on consumers
Ultimately, these issues regarding the manufacture and supply of UK-built EVs will have a knock-on effect on consumers. The effect of shortages on production has already been keenly felt by motorists, as a global shortage of semiconductors resulted in a car production bottleneck and sympathetic increase in the price of used vehicles.
As EVs become set to overtake ICEs in vehicle marketplaces, consumers are asking shrewd questions about the difference in running costs between the two – with EVs representing a more significant up-front cost, there are those worried that additional costs or even a crash could result in individual financial hardships beyond those caused by ICE vehicles. Insurance coverage works in much the same way as with ICE vehicles, with PCP GAP insurance available to cover the full value of any finance agreements past initial insurance coverage – giving drivers a significant financial cushion. Meanwhile, road tax does not apply to EVs owing to their zero-carbon status on UK roads.
