Pressure is mounting on the UK government to bolster domestic EV production or risk “losing the race,” according to Labour MPs, as firms look to build factories elsewhere.
Jaguar Land Rover owner Tata said last week it was considering building its new EV factory in Spain rather than the UK, a prospect which may have become far more attractive after the European Union geared up to announce its response to the US Inflation Reduction Act on Thursday.
Under new plans, EU member states will be more easily able to grant subsidies for clean tech, like those offered in the US which aided investment in the sector to soar to US$89.5bn between August and February, as per data from activist group Climate Power.
Tata added last week it would only choose to build in the UK if the government forked out £500mln to fund its prospective site in Somerset, with a move abroad set to mark a major blow for Britain’s EV market.
Labour MPs added to pressure on Thursday, announcing the party would provide £2bn to fund eight EV battery gigafactories if it were to win the next election.
MP Louise Haigh tweeted the plan would “put Britain in the driving seat,” also providing “tens of thousands of jobs” and “accelerating the roll out of EV chargers”.
Britain has struggled to make leeway in the growing global EV sector, with hopes for domestic battery production largely resting on start-up Britishvolt, recently bought by Australian firm Recharge Industries after falling into administration in January.
According to Labour, the UK is set to boast just one-tenth of the battery production capacity of Germany by 2025, despite British-registered cars numbering around two thirds of those in its continental counterpart as of 2022.