Autumn Statement Reaction: Chancellor pledges £2bn to boost EV sector

Chancellor Jeremy Hunt has pledged £2bn to the automotive sector to help boost the transition to electrification.

Although cuts to National Insurance grabbed the headlines of the Chancellor’s Autumn Statement, Hunt also announced £2bn in grants and loans for the automotive industry to continue its move towards electrification. A further £50m will also be made available for apprenticeships in engineering and skill shortage areas.

The automotive sector, and particularly the EV industry, has reacted positively to the statement, with many welcoming the investment into electrification after Prime Minister Rishi Sunak pushed the ban on the sale of new petrol and diesel vehicles back to 2035.

Edmund King, AA president, said: ‘To help smooth the electrification journey, The AA welcomes plans to speed up access to the grid, investment in zero emissions within the automotive industry and funding to attract new engineers into the sector.

“We would still like to see incentives for drivers to help them to take part in the zero emission transition when they are ready to do so. Hopefully these incentives, a further freeze in fuel duty, and a cut in Insurance Premium Tax will be outlined in the Spring Budget.”

Philip Nothard, chair of the Vehicle Remarketing Association, added: “It was encouraging to see a £2bn investment in zero emissions manufacturing although given the scale of global spending on EV investment, this is a relatively small amount. There’s also no sign of additional help to support electric cars in the used car sector. We know that large numbers of EVs are about to enter the remarketing cycle and that there isn’t necessarily the demand in the market to soak up that volume. Measures such as subsidies or interest free loans may be needed at some point before the end of the decade.”

James Lett, Technical Editor at Autodata, also commented: “Like many in the industry, we had high hopes that the Autumn Statement would recognise the critical investment and support needed in the transition to EVs. The expensive tools and widening skills gap to repair EVs is alarming, and without government support, garages and auto technicians are being left behind in the electric revolution.

“Whilst the ban on combustion engine vehicles has been extended to 2035, thousands of EVs are already on the roads and this will grow exponentially as manufacturers continue to pump an ever-increasing number of EVs into the market.  But, they can only be serviced or repaired by technicians with specialist training and tools. Neither of these are cheap and there is no government investment to change that. Not only does this mean garages are losing money by turning down business, EV drivers can’t access the services they need to safely be on the road.    

“Though the backbone of the automotive industry has been forgotten about today, I do hope that the message is being heard loud and clear at Downing Street. The EV revolution cannot happen until garages receive the support they need.” 

Mike Morgan, Executive Director of Autocraft EV Solutions, said: “We wholeheartedly welcome the Government’s decision to support the automotive industry with £2 billion in funding. Not only is a thriving automotive sector in our national economic interests, it is also essential from an environmental perspective as the industry transitions to cleaner forms of propulsion.

“Electric vehicles will play an increasingly important part of this journey, and a coherent strategy to support the continued growth of the sector is urgently needed. Government investment in more efficient battery technologies is vital but funds must also be made available for strengthening our capability across EV testing and repair. Specialisms such as EV battery remanufacturing will be essential for extracting the maximum environmental benefit from battery packs, either through servicing or second-life applications, so that none are ever prematurely recycled or sent to landfill.

“Investment in such technologies will not just help from an environmental perspective; it will also breathe new life into the country’s EV market by enabling retailers and vehicle owners to gain a transparent picture of overall battery health, thereby instilling greater consumer confidence. By truly maximising the lifespan of each and every battery, and the associated environmental benefits, the British automotive industry can make the greatest impact toward its circularity goals. We believe the Government has a duty to support progress in this area and hope it will receive the recognition it deserves moving forward.”