Opinion: In the driving seat to make significant change

As carmakers continue to call for a Brexit-related U-turn to avoid costly tariffs they say could pull the handbrake on UK electric vehicle production, Paul Butler, chief executive at North East Automotive Alliance, looks at the region’s green motoring landscape, and how existing and new investments leave it well placed to play a big role in future change.

 

The North East is synonymous with passenger vehicle production. 

Nissan recently returned to the number one vehicle producer spot in the UK, showing a 16.5 per cent increase on 2021 volumes. 

The Qashqai was officially announced as the UK’s favourite car of 2022, the first time in 24 years a British-built vehicle has been the number one seller. 

This marks a major coup for the North East, cementing our position as one of the most established and productive manufacturing regions in Europe.

The region has also led the electrification revolution, with a heritage dating back to the 1920s. 

Today, the North East is home to Europe’s most successful battery electric vehicle, the Nissan Leaf, Europe’s first ‘gigabattery’ manufacturing plant, at Envision AESC, and we are the only UK region with full power electronics, motors and drives capability.

However, as a country, are we falling behind our competitors? 

In May, electrified vehicles accounted for 54.8 per cent of all new vehicle registration. 

Yet electrified vehicle production accounted for 30 per cent of all vehicles made in the UK.

Rules of origin pose a significant risk to the UK automotive sector, particularly for batteries. 

The EU rules on parts sourcing has been in place for several years now but, as we come closer to the deadline in January, we know some manufacturers may be getting concerned that supply chains are not yet matured enough in the UK and Europe to ensure these requirements can be met. 

Presently, at least 40 per cent of the content of electric vehicles, and 30 per cent of batteries, must originate from the EU. 

From January 2024, though, 45 per cent of the vehicle and 50 per cent to 60 per cent of batteries must include EU content, to avoid additional tariffs. 

Nissan is the only car plant in the UK with a battery plant located nearby, which puts our region in a much better position than other areas. 

Nevertheless, to support battery manufacturing in the UK, we must secure the critical supply chain, particularly cathode, anode and electrolyte production, and these are key targets for the Government and Office for Investment.

The North East really is the UK centre for battery manufacturing. 

In addition to the UK’s first ‘gigafactory’, there are two further major battery investments from Envision AESC and Recharge Industries, which recently acquired Britishvolt. 

We already have electrolyte production, thanks to Mitsubishi Chemicals, in Billingham, near Stockton, and, given our strengths in the chemical sector, I believe the North East is the ideal place to locate cathode and anode production in the UK, as we have the infrastructure, the skills and the battery manufacturers all located in the region.

Increased local content will offer huge opportunities for supply chain companies, as well as inward investment.