Chancellor Jeremey Hunt slammed the US Inflation Reduction Act on Monday after battery producer AMTE Power PLC (AIM:AMTE) became the latest to hint it could be attracted across the Atlantic by the subsidies.
AMTE said it was difficult to justify keeping production in the UK over the weekend, given the vast subsidies which have been offered to clean technology companies under the near-US$400bn US Inflation Reduction Act.
"We don't have a competitive environment in the UK at this moment in time," AMTE chief executive Alan Hollis commented on Sunday, “the answer is perfectly clear where the most economic place for the gigafactory will be”.
Jeremey Hunt subsequently slammed the act on Monday, arguing it was “wasteful to spend money subsidising factories that would have been built anyway”.
“Secondly, when you take subsidies away, you can end up with a business that's not viable,” he added while speaking to Sky News.
The government has faced pressure to introduce subsidies similar to those across the Atlantic from the likes of Tata Motors Ltd-owned Jaguar Land Rover, which has threatened to build its new factory in Spain rather than Somerset if not offered public funding.
Electric van start-up Arrival has also said it would move operations across the Atlantic, as the UK EV market struggles to make leeway.
However, Hunt made it clear last month that the UK would not go “toe-to-toe” with the US in offering similar incentives, such as tax credits, despite the act having attracted an estimated US$200bn worth of investment since it was introduced last August.
“If we were to turn our backs on free trade, that will be a disaster for the world economy,” Hunt added.
“We will enter into a dark ages period. We do not want to move to protectionism.”