Tuesday 24 September 2019 / 10:01 AM Energy / Environment / Rebecca Long Bailey

Electric Car Revolution – Labour’s plan to strengthen the UK automobile industry, creating and safeguarding 220,000 jobs

Today (Tuesday), Rebecca Long Bailey MP, Labour’s Shadow Business, Energy and Industrial Strategy Secretary, will announce Labour’s plans to strengthen British car manufacturing and tackle climate change, following Labour’s previous announcements on the Electric Car Revolution.

Labour’s Green Industrial Revolution will accelerate the electrification process, safeguarding 186,000 workers directly employed in the automotive sector threatened by closures – and creating an additional 32,000 new jobs, taking the total to almost 220,000.

Labour will make £3 billion available to invest in new electric car models and technology, to enable vehicle manufacturers to bring new electric car models into production. Labour will exempt new investment in plant and machinery from business rates.

Labour will also invest over £2 billion towards the construction of three battery plants (‘gigafactories’) to manufacture the batteries needed for electric cars. Domestic ‘gigafactories’ are essential to maintaining a UK automotive industry. Labour’s National Investment Bank will support the current automotive supply chain with access to finance to grow and adapt to the design and component parts needed for the vehicles of the future.

These ‘gigafactories’ will be located in South Wales, Stoke and Swindon – potentially on the current Honda site. Each one will employ 3,184 workers. A further 16,900 workers will be employed in the chemicals supply chain, particularly concentrated in the North West, Yorkshire & Humber, and South West.

The car industry is under siege with both Honda and Ford announcing plant closures, Nissan moving production to Japan and Dyson choosing to locate their EV production in Singapore.

At the same time, accelerating the shift away from cars driven by fossil fuels to electric cars powered by wind and solar is becoming more urgent to tackle the climate emergency.

Labour will invest £500 million into four metal reprocessing plants to reprocess cobalt and rare earth minerals used in batteries, creating an estimated 3,000 new jobs.

This will tackle the detrimental environmental and human rights impacts associated with battery production, reduce imports of raw materials and create new UK supply chains.

A further £500 million will be available for research and development to encourage the UK to become a world leader in electric, connected and autonomous car technology.

These plans form part of Labour’s ‘Electric Car Revolution’ including:

  • Investing £3.6 billion into a mammoth roll out of electric vehicle charging networks.
  • 2.5 million interest free loans for the purchase of electric vehicles saving buyers up to £5,000.
  • A scrappage scheme for fossil fuel cars over ten years old saving buyers £2,000.
  • Calling on business car fleets to go 100 per cent electric by 2025, including by removing the £320 Vehicle Excise Duty surcharge on electric vehicles purchased for fleet use about £40,000, and installing EV charging stations in all workplaces that transition their entire fleet to EVs by 2025, and maintaining the existing schedule for company car tax for pure electric vehicles at 2 per cent beyond 2022/23.
  • Making the entire government car fleet electric by 2025.
  • Thirty-thousand electric cars into UK streets to be accessed via publicly owned Community Car-sharing Clubs.

On day one of a Labour government, we will begin a broad consultation with industry and trade unions exploring the transition from internal combustible engine (ICE) to zero emission vehicles at the earliest possible opportunity. It is our objective to secure through these discussions a rapid but just transition that ensures the necessary infrastructure and support for skilled manufacturing jobs is in place with a firm ambition to phase out the sale of ICE vehicles by 2030.

On boosting electric car manufacturing, Rebecca Long Bailey MP, Labour’s Shadow Business, Energy and Industrial Strategy Secretary, said:

“The automotive sector is one of the UK’s industrial success stories. However, the sector is under siege from Brexit uncertainty and the government’s lack of ambition on electrification.

“At the same time, we need to accelerate the shift away from fossil-powered cars if we’re to tackle the climate emergency.

“If we want our automotive sector to flourish, we need a government who is not afraid to intervene.

“Labour’s Electric Car Revolution support package will accelerate the electrification process and offer a lifeline for a new era of clean manufacturing – part of Labour’s Green Industrial Revolution.”

Ends

Notes to Editors

Electric Car Revolution

  • Labour has also announced that it will invest £3.6 billion into a mammoth expansion of the UK’s electric vehicle (EV) charging networks.
  • 2.5 million interest free loans for the purchase of electric vehicles saving buyers up to £5,000.
  • Labour will introduce a scrappage scheme to replace cars driven on fossil fuels over ten years old with new electric cars, saving buyers an estimated £2,000.
  • In an effort to boost business demand for electric cars, Labour will remove the £320 Vehicle Excise Duty surcharge on electric vehicles purchased for private fleet use above £40,000 for two years.
  • Labour will also commit to making the entire government car fleet electric by 2025. This is more ambitious than the Conservative’s aim for 25 per cent of the government fleet to be electric by 2022.
  • Labour will put 30,000 electric cars into UK streets to be accessed via a publicly owned community car-sharing clubs.

UK car manufacturing

  • The automotive sector is one of the UK’s industrial success stories, contributing billions in GVA, employing over one million people throughout the supply chains, and accounting for 12 per cent of UK exports.
  • UK car production in the first half of the year fell by a fifth compared to last year, to 666,000, the 13th straight monthly decline.
  • In the period January-June, newly pledged investment was down more than 70 per cent.

Gigafactories

  • The investment will be on a joint venture model including a public equity stake (owned by regional or local public bodies).
  • £2.3 billion will be allocated for investment into three new gigafactories, modelled on contributing 51 per cent of the costs of each factory– costed at £1.5-1.7 billion each.
  • The £2.3 billion in public investment is estimated to unlock £2.3 billion in private sector investment directly in the factories, excluding additional supply chain investment.
  • Each 16 GWh gigafactory is estimated to employ 3,184 workers, with a further 5,637 employed in the cathode, anode and electrolyte supply chain per gigafactory.Source: Skills and Training Needs for the UK Transition to Electric Vehicles. The Faraday Institution. 25 April 2019
  • The Faraday Institution estimates that between four and 13 high-volume, battery production plants (‘gigafactories’) will be needed for the UK to have a flourishing – or even sustainable – automotive industry and is an opportunity in itself. This has been echoed by the SMMT and Unite the Union.

Equity finance for investment in new electric models

  • Automotive manufacturers will bid for a portion of the £3 billion public investment, match-funded by the company, to be used for investing in the electrification of their plant or bringing a new electric model into production.
  • The investment will take the form of equity finance; capital in exchange for shares in the company.
  • This funding will be available in 2020/21 and 2021/22.
  • It is not uncommon for the state to have stakes in their automotive sectors. For instance, the French government has a 13 per cent share in PSA Group after it agreed to take part in a recapitalization investment plan to help the company in 2014.

Research and Development

  • This investment will be used for further research and commercialisation of battery technology and recycling, electric vehicle range, EV charging (e.g. smart charging, induction) and, at an earlier stage, autonomous and connected vehicles.

Business Rates

  • This is an existing commitment and cost neutral.

Building domestic supply of battery raw materials

  • There are concerns that extraction of cobalt contributes to conflict and human rights abuses in the Democratic Republic of Congo, and rare earth elements face a high risk of supply chain disruption. Scarcity of supply and volatile costs can impact on UK manufacturing, especially as production – and hence demand for inputs – grows. https://www.amnesty.org/en/documents/afr62/7395/2017/en/
  • Labour will invest £500 million into four metal reprocessing plants to reprocess cobalt and rare earth minerals used in batteries, and £50 million into local authority-run collection sites.
  • This will create a new supply chain and domestic source of key metals, and an estimated 3,000 new jobs. Domestic car and battery manufacturing will rely less on risky extraction on Congo Dr and China.
  • Labour will also set standards for recycled content in battery manufacturing, to reach a minimum proportion of 45 per cent by 2035.

Phase out of ICE vehicles consultation