Soaring energy costs threaten to unplug the electric car revolution Business

Rising energy costs threaten to sabotage Boris Johnson’s plans for an electric vehicle revolution, auto industry chiefs have warned.

Making electric cars requires large amounts of energy, while higher bills could also deter drivers from switching to gasoline-powered models.

Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders, said that of all the challenges facing the industry, “the most worrying at the moment is obviously the rapidly rising cost of energy”.

“Already before this price volatility in the UK, we had some of the highest energy costs in Europe, and that fundamentally undermines our competitiveness, so times are tough,” he added.

The UK makes seven combustion engine cars out of 10 bought domestically, while for electric cars the number rises to four, says former Aston Martin boss Andy Palmer, who now heads the company electric Switch buses. “Put simply, we are exporting our jobs,” he warned.

The government has tried to encourage carmakers to produce more electric vehicles in the UK, particularly in the so-called red wall constituencies in northern England which voted Conservative in the last election.

Germany, China and the United States are forging ahead with dozens of “gigafactories” to produce cutting-edge batteries to power modern electric cars.

Proponents of gigafactory construction projects in Britain argue that the batteries are too heavy to be economically viable to import from overseas.

The UK was the world’s third-largest carmaker in the 1950s, but has slipped to 17th place today.

Raw material costs and chronic parts shortages are also weighing on automakers and driving higher prices on the forecourts.

Separately, BP is set to spend £1bn on charging stations in the UK, the Financial Times reported. BP did not respond to a request for comment.

BP said it plans to have 16,000 fast-charging points in the UK by the end of this decade, up from 8,000 today.

Last year the UK had around 16 EVs for every public standard charger, but that ratio is expected to worsen to around 32 EVs per charger this year, with significant regional variation, the SMMT said.

Mr Hawes warned: “Things are getting worse because of this pace of market transition for electric vehicle sales. We need the infrastructure to catch up.”

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This notice was published: 2022-03-23 15:39:38

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