Government must rival US $370bn IRA or risk gutting UK electric car industry

The government needs to ramp up spending on Britain’s electric vehicle (EV) industry or risk being left behind by the US and its peers who are injecting hundreds of billions of pounds into their auto industries.

That’s according to the Society of Motor Manufacturers and Traders (SMMT), the representative body of the automotive sector, who have today called on lawmakers to launch a spending package in response to the US’s $370bn inflation reduction act.

The globe’s top electric car makers will leave the UK to capitalise on generous tax breaks and free state funding unless the government launches a package of support to make EV production more affordable.

“With other parts of the world turbocharging their support for the zero emission vehicle transition, we need to step up to compete in this global race. Every part of the country has a stake in the switch and with fast, decisive action we can deliver for Britain the growth, jobs and green prosperity this country deserves,” Mike Hawes, chief executive of the SMMT, said.

Car production has floundered in Britain over the past few years and output is now at its lowest 65 years.

Lifting EV production could help arrest the British car industry’s decline and generate jobs, the SMMT said.

“The UK is proving a less attractive proposition for new vehicle manufacturing facilities,” Richard Peberdy, UK Head of Automotive for KPMG, said:

“It’s imperative for the future of the UK car industry and its related employment and exports, that industry and government jointly address how the UK can be as globally competitive as possible.”