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UK must lead in battery and fuel cell technology or risk losing its automotive industry

4 min read

The UK is at risk of losing its existing automotive industry, falling further behind global competitors in battery manufacture and failing to meet our net-zero commitment.

As a member of the House of Lords Science and Technology Select Committee, I’m delighted to draw attention to our report into battery and fuel-cell technology, published today. Our findings are stark and reveal that the UK is at risk of losing its existing automotive industry, falling further behind global competitors in battery manufacture and failing to meet our net-zero commitment.

We do however have a real opportunity in the UK to take a global lead in battery and fuel cell technology, if the government acts on our recommendations to support innovation, supply chains and skills.

Our chair, Lord Patel makes it clear that “the government must act now to avoid the risk of the UK not only losing its existing automotive industry, but also losing the opportunity for global leadership in fuel cells and next-generation batteries.”

The Battery strategy goes flat; net-zero target at risk report covers technological developments, strategic issues facing the UK and provides a timeline of key deadlines and decisions.  The Committee makes detailed recommendations including securing supply chains, ensuring the automotive sector has sufficient skilled workers, increasing funding for research and development and demonstrating greater urgency and clarity in phasing out the sale of new diesel HGVs, expanding the public charging network and publishing the government's hydrogen and decarbonisation strategies.

If we do not secure UK supply chains, manufacturing will move to the EU

Recent announcements regarding the building of new UK giga-factories are welcome but the pace and scale of building these facilities will not meet demand for batteries and is likely to be a significant factor in whether automotive manufacturing stays in the UK or moves overseas.

Another factor is the Rules of Origin agreement with the EU. The agreement comes into force in 2027 and will require that the battery and 55% of a vehicle’s components be manufactured in the EU or the UK. If we do not secure UK supply chains, manufacturing will move to the EU.

To support the growth in UK supply chains, the government must urgently develop a strategy for critical raw materials. The UK should utilise its natural resources, develop industrial-scale recycling, and use its expertise in mineral processing to leverage collaboration with countries with larger natural resources.

This strategy must address ethical and environmental issues associated with resource extraction, processing, and recycling. In 2030 the sale of new petrol and diesel cars and vans in the UK will come to an end but without major expansion in production capacity, the 2030 target will be undeliverable or will have to be achieved using imported batteries and vehicles.

Another key cross-cutting issue is skills and training. To support the automotive sector’s transition from mechanical to electrical technology, the government must support training and upskilling, and must ease the limits on recruiting overseas staff for manufacturing and research.

Our inquiry also concludes that heavy transport has received insufficient government focus, and a lack of regulations and incentives has severely hindered the use of batteries and fuel cells. The sector needs urgent clarity about which technological options are best suited to its needs, and firm commitments that infrastructure will be deployed at scale.

Fuel cells offer solutions for heavy transport, heating, and power generation, but they receive comparatively little public funding for research, innovation, and deployment. The UK has several world-class companies in this sector, and the government can do much more to help realise their full potential.

On the eve of COP26 we must raise the bar on tackling climate change. It is absolutely right that the government has set some of the most ambitious targets to cut emissions and the Prime Minister has announced that “the UK will be home to pioneering businesses, new technologies and green innovation … laying the foundations for decades of economic growth in a way that creates thousands of jobs”.

We hope that this report will help do just that and play a role in helping the government achieve net zero emissions and take advantage of the great opportunity presented by batteries and fuel cells for UK research and manufacturing.  

The opportunity we have now is like nothing else since the transition from whale oil to rock oil.... and that opportunity will last for decades. This is a necessity for the planet but could also be a prize for UK Plc.


Lord Holmes is a Conservative peer. 

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