Electric vehicle transition could net UK £16.1bn windfall
A new report has calculated that the electric vehicle transition could add £16.1bn to the UK economy by 2035.
The study was commissioned by the Energy and Climate Intelligence Unit (ECIU) and included analysis from CBI Economics.
It concluded that the electric vehicle revolution could increase the UK economy by 35%, or £16.1bn, by 2035. However, it also warned that slow transition could cost the economy 71%, or £34.1bn, over the same time period.
The UK automotive sector currently contributes £46.8bn in Gross Value Added and provides more than half a million jobs. According to forecasts made by CBI Economics, the sector risks losing three quarters of its workforce (404,000 jobs) over the next decade if it does not manage the EV switch successfully.
Louise Hellem, chief economist at the CBI, said:
“The UK’s automotive sector is a vital pillar of the UK economy. The shift to electric vehicles presents an opportunity for the sector in harnessing its ingenuity and innovation in an evolving global market; but like in every country the transition also presents challenges.”
Electric vehicle market
Hellem continued: “The UK is competing in a global market for battery electric vehicles, leveraging its rich automotive heritage, robust R&D capabilities, and high-skill manufacturing. The UK ranks third globally for research quality in industrial batteries, and its automotive manufacturing sector and battery start-up ecosystem are the second highest in Europe and fourth worldwide by value.
“Significant recent investments by major industry players in electric vehicle production and its supply chain in the UK highlight the sector’s potential. However, scaling the UK’s BEV supply will hinge on future demand, creating a conducive environment for investment, and maintaining a favourable trade environment, especially since nearly 80% of UK vehicle production is exported.
“Our analysis highlights the necessity for a proactive, ambitious strategy to support the sector’s evolution. In this transformative period, it is essential for government and industry to collaborate, ensuring the UK remains competitive globally while building on its rich automotive legacy.”
