The UK’s car industry could vanish without a substantial subsidy package similar to those offered by the US and EU, according to industry veteran Andy Palmer.
Palmer, now chairman of electric battery firm InoBat, warned that a failure to offer subsidy packages would result in UK-based car manufacturers moving elsewhere as competition for the transition to electric vehicles intensifies globally.
Palmer said the UK is already “managing decline” in its car-making industry. He called on the UK government to follow in the footsteps of the US and EU with a package that would boost the sector and keep jobs in the move to electric vehicles.
“You are into a period of either you compete … or you manage the decline of the British industry down to fundamentally next to zero,” Palmer said.
“We have the last throw of the dice in order to bring back some part of that industry, if we don’t then we have to look for alternative employments for the 820,000 people.”
Palmer’s comments came after the US revealed the Inflation Reduction Act (IRA), which provides substantial subsidies and tax credits to American businesses producing greener technologies like electric vehicles, renewable electricity and sustainable aviation fuel.
In response, the UK government is communicating with the US administration to tackle concerns about the IRA, adding it would strongly protect the interests of the UK industry.
UK’s approach to sustainability
The car industry is going through a significant change as governments worldwide move away from fossil fuels. The UK government has already announced that the sale of new petrol and diesel cars will be prohibited in the UK by 2030 as part of plans to cut carbon emissions.
Jeremy Hunt, the UK’s Secretary of State for International Trade, said that the country’s strategy for attracting investment would be “better” than that of the US and EU. He noted that the UK would neither participate in a “distortive global subsidy race” nor directly compete with its allies.
Hunt’s remarks come amid concerns that the US is monopolizing investment opportunities that could revolutionize the manufacturing industry worldwide.