They were supposed to create a local electric car industry and wean manufacturers from their dangerous dependence on China.
< p>But as the dust settles, the rules on car imports agreed between the UK and Brussels after Brexit look less like a far-sighted, win-win deal than like a real existential threat to struggling British companies.
C January of the following year, vehicles must have at least 45% components, by value, made in either the UK or the European Union. Those who do not reach this level will be subject to a 10% duty on exports to the continent.
The plan was to encourage companies to build supply chains closer to home, especially for the so-called gigafactories that produce batteries for electric vehicles, an area increasingly dominated by China.
The problem is that the UK has not been able to create homemade batteries. And as the deadline approaches, automakers fear the risk is becoming unsustainable.
Automotive giant Stellantis said the tariffs could mean it will have to close its Vauxhall van plant in Ellesmere Port. Ford and Jaguar Land Rover (JLR) also said it was too early to introduce the rules.
“It will destroy potential profits,” says Andrew Graves, an automotive expert at New York University. Bath.
«Basically you're going to start losing all of British industry, not just Vauxhall and a couple of other manufacturers, but there's really no industrial reason to be based in the UK.»
Honda has already left the UK by closing its factory in Swindon, which has dealt an irreversible blow to UK production figures. That leaves Nissan, JLR, Toyota and Mini as the big manufacturers here.
About 80% of British-made cars are sold overseas, half of them in the EU. Stellantis currently imports batteries made in China by CATL, while Nissan only supplies gigafactories in the UK and Mini gets components from Germany. Toyota does not yet produce electric vehicles in Europe.
While 45% also sounds like a modest demand for local parts, electric vehicles rely on a variety of exotic materials from lithium, cobalt and nickel in batteries to magnets used in electric motors.
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Many of the recycling plants for these materials are located in China, and a host of other imported automakers—wiring harnesses from Ukraine, for example—are beginning to tip the scales towards foreign-made components.
Compliance with the rules means building gigafactories, as well as the facilities that supply them; factories for the processing of lithium, graphite and other materials.
As the challenge to 2024 is a challenging one, the industry needs to act quickly.
“At a time when every country is accelerating its transition to zero-emission transport and global competitors are offering billions to attract investment in their industries, we need to quickly find a pragmatic solution.» says Mike Howes, executive director of the Society of Automobile Manufacturers and Traders lobby group.
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“We urgently need an industrial strategy that will create an attractive environment for investment and make the UK one of the best places in the world for advanced automotive manufacturing.”
The last decade has not been kind to the British car industry. Brexit has made the job more costly due to additional paperwork when moving cars and parts across the border.
Russia's attack on Ukraine has driven up electricity bills, exacerbating an existing price gap that makes electricity in the UK more expensive than on the continent.
The war and the pandemic have turned supply chains on their head and led to a shortage of parts, especially computer chips. Production remains below 1 million a year, well below its pre-pandemic peak.
Earlier this year, Britain's most ambitious independent battery maker, Britishvolt, collapsed.
It failed, founder Orral Najari said, in part because the government delayed financing the plant after the departure of its biggest political backer, former Prime Minister Boris Johnson.
Mr Najari told Sky News that he fears the UK is too far behind to catch up.
But the UK still has options, says Fasken mining lawyer Guy Winter.
EU&# He said his biggest fear was that British automakers would buy cheap Chinese components and undermine the bloc's own industry.
China dominates the production of batteries for electric vehicles. Photo: VCG/VCG via Getty Images.
However, he says that the creation of a processing industry in the UK could help allay those concerns.
Many of the minerals used in electric vehicles come from Australia and Chile, but this is not necessarily a problem if the value added comes from refining and processing them in the UK.
Meanwhile, UK lithium mines can produce most of the supplies needed for one of the most important elements in batteries. The UK also has access to some of the world's largest wind farms, cheap land in the northeast, and skilled workers to recycle metal and other components.
The industry needs a plan where the UK can show that it is laying the groundwork for building a supply chain for electric vehicles.
Showing to Brussels that the UK supports building a European supply chain and wants to loosen China's grip on the industry will likely oil negotiations .
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The EU is also likely to be nervous about the sheer amount of subsidies the US has shown it is willing to give to green industry by allocating hundreds of billions of dollars under President Joe Biden's Inflation Reduction Act.
» Now there will always be fear in the EU that the US will act in its own interests and at the possible disadvantage of the EU,» says Winter.
This could mean that the EU will want a friendlier relationship with the UK to work together, pooling investment power.
The UK can offer some lithium reserves and its huge potential for offshore wind power.
But progress so far doesn't bode well, Winter adds, recalling a conversation about critical minerals with a parliamentary committee three years ago.
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«I said it was now a seven-year imperative,» he says.< /p>
» And, in fact, we did nothing in real terms. I think the progress has indeed been incredibly disappointing.”
A hint of more optimistic news came from Chancellor Jeremy Hunt. The UK is trying to help Jaguar Land Rover owner Tata set up a battery plant in the UK to supply the automaker.
He said at the annual British Chambers of Commerce conference that “we need battery capacity in the UK.”
Mr Hunt said: “All I would like to say is it's to look at this space because we're very focused on getting the UK to get this electric car manufacturing facility.»
If British automakers are to avoid disaster, this focus must work — and fast.
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