In 2020 the UK produced 1.8 million internal combustion engines in both diesel and petrol formats, the majority of which were exported back into the EU. As recently as 2017 Jaguar Land Rover opened its £1 billion state of the art engine factory in Wolverhampton. Since then the Government has announced the bringing forward of the ban on new production of ICE vehicles to 2030. This announcement along with Brexit has contributed to Fords decision to close its Bridgend engine plant, Melrose GKN to close its Erdington factory and Honda to close Swindon with over 5000 job losses to date. Vauxhalls continued production at Ellesmere port remains under threat whilst protracted discussions continue with the UK Government about supporting the creation of UK GIGA plants for battery production.
It is estimated by the Faraday institute that in order to meet demand for batteries 8 Giga plants will be needed by 2040 creating 250,000 jobs in the supply chain. Without them car volume production in the UK will decline beyond the critical point of supply chain viability with the loss of 114,000 jobs .
Dame Julia King chair of the Climate Change Committees adaptation committee explained “If we are to keep car assembly, the Nissans and Toyotas we are going to need the battery production because otherwise they are going to say shipping the batteries all the way to the UK just to assemble them into cars is not very sensible; we might as well assemble the cars somewhere else”.
She said “We need these big investments”.
BMW Hams Hall Mini assembly plant is a case that demonstrates the point. Currently employing 1000 people it is switching production from Diesel/petrol to electric vehicles and currently produces 35,000 electric minis per year. In the diesel / petrol vehicles the UK produced parts content is 40%, this reduces to 20% for the electric Minis as batteries and motors need to be brought in from Germany. There are also far fewer parts in electric vehicles and a low 20% local parts content would attract an EU import tariff from 2027 as the UK is now a third country outside of the single market.
The argument then for a local supply chain seems irrefutable on both economic and carbon emission grounds. There is no doubt that ABM will be a vital part of the European supply chain.