Ministers must urgently secure supplies of raw battery materials to save the British car industry and meet the Government’s target of banning sales of petrol and diesel vehicles by 2030, a Lords committee has warned.
A report from the House of Lords’ science and technology committee urges the Government to shore up supplies of key components such as lithium, develop its own facilities to recycle batteries and dramatically boost funding for the domestic “gigafactories” needed to supply electric cars.
It demands more incentives to boost lithium mining in Cornwall and to secure agreements with other countries to secure supplies of elements such as cobalt.
The Government is putting hundreds of millions of pounds into public support for “gigafactories”, the giant battery plants needed to encourage domestic electric car production.
Gigafactories and EV battery production will boost employment
The factories are seen as crucial to ensuring the UK remains a major exporter of cars to the EU after 2027, when new “rules of origin” will require 55pc of a car’s value to originate in the UK or EU to avoid tariffs.
However, the Lords warned that this would be impossible without securing the basic materials needed for the batteries, as countries including China and the US seek to guarantee their own supply chains. It called on the Government to outline a “critical raw materials strategy” that made better use of domestic resources.
“Without the necessary UK supply chains, manufacture will move to the EU,” the report says. It added that the Government’s 2030 target for outlawing sales of new petrol cars, a key plank of its net zero strategy, could become “undeliverable” without a major expansion in capacity.
The report, published on Tuesday, says that ministers’ rosy visions of Britain’s electric car future stand in striking contrast with much of the industry, which fears the UK is falling behind key competitors.
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“There was a stark disconnect between the optimism of ministers and officials that UK industries can transition in very tight timescales, and the concerns of our other witnesses that the UK is far behind its competitors and faces significant challenges with innovation, supply chains and skills,” the report says.
“The UK’s current trajectory of battery manufacture risks missing the Government’s target for the transition to electric light road transport, such that the UK may not be able to retain its automotive industry at its current scale.”
Ministers have committed around £500m in funding for British gigafactories, but the Lords said this was insufficient compared to Europe.
“The Government will need to commit further funds for gigafactories, supply chains and training ahead of the 2027 and 2030 deadlines, to ensure that the UK’s automotive sector can maintain manufacturing at its current scale,” it said.
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Domestic battery production is seen as central to vehicle manufacturing, since storage and transport from a gigafactory to a production line substantially raises costs.
The Lords said the Government should capitalise on expertise in new ways of storing energy such as hydrogen fuel cells, calling on it to set up an alternative to the publicly-funded battery research centre, the Faraday Institution, for hydrogen storage.
Lord Patel, the committee’s chair, said: “The Committee found that the Government’s ambition to reach net zero emissions is not matched by its actions.”
The Government’s electric car plans were recently boosted by Nissan’s commitment to Britain’s first gigafactory, which included £100m of taxpayer support.