In late November, the UK launched its battery strategy with the aim of becoming a competitive industry regarding design and development on a global scale.
The government’s proposals have the objective of achieving a leading role as a nation in the sector’s supply chain by 2030.
This strategy is part of the Smarter Regulation program published in May of this year, which seeks to reduce tax impositions on businesses and promote innovation and growth.
The main idea of the plan is to apply regulations only when necessary and ensure that their design and use are balanced and future-proof.
These implementations are orchestrated by the Department of Business and Strategy under the leadership of the Minister of State for Industry and Economy, Nusrat Ghani.
“Batteries will play an essential role in our energy transition and our ability to successfully achieve the net-zero emissions goal by 2050,” states the public official.
Ghani emphasizes the action of allocating more than £2 billion for research and development (R&D) and supporting the manufacturing and progress of zero-emission vehicles, their batteries, and the supply chain for five years.
The UK government’s article also highlights the nation’s unique position globally in terms of advancements in sustainable mobility.
Key advantages include innovation, since it ranks third in the quality of industrial battery research, a globally valuable start-up ecosystem, and an automotive industry ranking second in Europe.
Growth in this sector not only signifies a transition to non-polluting practices but also a positive financial impact for the region.
“The scale of the opportunity for the UK economy is huge,” explains Ghani.
How would this project be carried out?
In addition to the initial investment of £2 billion for R&D and support within the automotive sector and its batteries, the article proposes multiple actions to promote sector development.
The department plans to provide sustained, consistent, and targeted support for large-scale, long-term research and innovation activities across various key areas of the supply chain.
The Ministry details ensuring that manufacturing skills training and education are well-supported by a high-quality and employer-led skills system.
Internationally, the UK will seek to expand market access for the trade of critical minerals and promote high international standards in supply chains when negotiating new Free Trade Agreements.
Additionally, there is an intention to explore options for global collaboration on batteries through new and existing forums.
Moreover, the government plans to allocate an additional £38 million to enhance the development facilities of the UK Battery Industrialization Centre.
What is happening between the UK and the EU?
The United Kingdom is among the most advanced countries globally, regarding green fleet share percentage in annual sales, surpassed only by Scandinavian nations, the Netherlands, Germany, and France.
All these advantages indicate that the UK might even climb a few positions within this limited ranking in the coming years.
However, within the private sector, there is uncertainty as a rule affecting EV sales could come into effect shortly.
According to the EU’s “rules of origin,” which would take effect from January 1, 2024, cars produced in both regions (EU and UK) should mostly be manufactured with locally sourced components to qualify as tariff-free.
Under these rules, exports of electric vehicles between the European Union and the United Kingdom could be subject to a 10% tariff if less than 45% of their value comes from the region.
This could mean an average increase of £3,400 for EVs manufactured in the EU purchased by British consumers and an increase of £3,600 for EVs manufactured in the UK sold in Europe.
Therefore, members of the European Commission have proposed delaying these rules by three years.
It is expected that EU member states will approve the plan in the coming days.
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