Vospers: Motor industry on right road

In August, new car registrations increased for the thirteenth month in succession and the van market grew for the eighth month in succession, as recovery in the industry continued.
New battery electric cars took their highest monthly market share for the year, accounting for 20.1% of the new car market. This was a result of a catch-up in business and fleet vehicle purchases with Tesla featuring two cars in the top ten sellers with attractive deals offering high benefit in kind savings to business company car drivers.
Large and small businesses, seeing a return to increased demand, continued to update their vans to more fuel-efficient vehicles, as more electric vehicles are introduced to the market and more cities look at congestion charges and London expands the ULEZ.
This week, expect to see an announcement that BMW is to invest hundreds of million pounds to prepare its Mini factory near Oxford to build a new generation of electric cars. Two new electric Mini models are scheduled to start production in 2026. This will safeguard the future of the facility, as well as their other factory in Swindon, which in total employs 4,000 people.
It is likely BMW will spend £600 million on updating the Cowley plant, including extending the bodyshop and building a new area for installing batteries. Swindon makes body panels for new vehicles. Prime Minister Rishi Sunak said this was “another shining example of how the UK is the best place to build cars of the future.”
This is another investment backed by the Government’s Automotive Transformation Fund, which has already backed Tata’s “gigafactory” in Somerset, which is expected to benefit from hundreds of millions in taxpayer support.
Stellantis has already begun production of electric vans at its Ellesmere Port factory in Cheshire, Nissan is expanding output of electric vehicles at its Sunderland factory and its partner Envision is building a gigafactory close by. Ford is also investing heavily in its Halewood plant and preparing to build electric motors, having closed its engine plant in Bridgend in 2020.
David Bailey, professor of business economics at Birmingham Business School said the UK has “been lagging behind other countries, not just in terms of battery production, but also in rems of EVs….but with the recent announcements things are going in the right direction.”
There are still many issues to be resolved but we are expecting to see the results of the House of Lords enquiry, which will advise the government what is needed to get the demand for electric vehicles back on track to meet the 2030 deadline.
The four main outstanding problems are price of the product against a similar petrol vehicle, the lack of infrastructure for charging, lack of range for longer distance travellers, and the higher rate of VAT for public charging. We look forward to their findings.