Britain’s car firms on brink of golden age: Minister reveals investors set to pump billions into electric vehicles – in boom to rival 1930s
- Lord Grimstone said the surge would be driven by billions of pounds of foreign investment into electric cars as manufacturers race to meet soaring demand
- He said the investment into electric vehicles would turbocharge the car industry in the same way the boom in mass production did from the 1930s to the 1950s
- Lord Grimstone revealed that the UK has 3,000 potential investment deals in the pipeline across the economy
Britain’s car industry is on the cusp of a new golden age of manufacturing that will rival the production boom of nearly a century ago, the Investment Minister Lord Grimstone has said.
The former Barclays and Standard Life chairman – who was also an adviser to Margaret Thatcher – said the surge would be driven by billions of pounds of foreign investment into electric cars as manufacturers race to meet soaring demand.
He said the huge wave of investment into electric vehicles would turbocharge the car industry in the same way the boom in mass production did from the 1930s to the 1950s, when Britain became the biggest exporter of cars in the world.
Driving force: Lord Grimstone said the surge in production would be driven by billions of pounds of foreign investment into electric cars
Lord Grimstone, an unpaid Minister who runs the Government’s Office for Investment, revealed that the UK has 3,000 potential investment deals in the pipeline across the economy.
This equates to ‘tens of billions’ of pounds of potential foreign investment into the UK over the next three years, he said, creating as many as 700,000 jobs in the coming decade.
Top of the list for foreign investors is electric car manufacturing and its supply chain, he told The Mail on Sunday, adding: ‘We are on the cusp of an auto renaissance that will take us back to the 1930s. This is a customer driven thing. All the car manufacturers have been caught short by the pace at which people are moving to electric vehicles.
‘Electric vehicles are going to be the business model for the next 30, 50 years. If Britain gets its fair share, or more than its fair share, it’ll set us up completely.’
Britain overtook France to become Europe’s biggest car maker in 1932, led by manufacturers such as Morris, Austin and Ford. By 1950, it produced 52 per cent of global car exports, driven by demand from the US, where demand outstripped supply.
That dominance started to fall away in the 1960s and 1970s, as British firms struggled to match cheaper models produced by rivals in Japan, Europe and the US. Lord Grimstone said he expected car manufacturing to return to the thriving industry it was ’50 or 60 years ago in this country’ before the decline.
He said that as well as the manufacture of vehicles, foreign investors were interested in funding the electric car supply chain, such as ‘gigafactories’ to make batteries for the cars.
Last month, Japanese firm Nissan announced a £1billion electric vehicle hub in Sunderland. Meanwhile, Dutch-based Stellantis, the owner of Vauxhall, is investing £100million in building electric vans at its Ellesmere Port plant in Cheshire. And Jaguar Land Rover is set to become an all-electric luxury brand by 2025, launching six new pure electric models from 2024.
UK car production in July fell to its lowest level since 1956 – to just 53,438 vehicles due to the semiconductor chip shortage and the ‘pingdemic’. But UK factories have produced a record 126,757 electric or hybrid cars since the start of the year.
Industry forecasts suggest electric vehicles will make up 25 per cent of total new car sales in 2025, up from 6.6 per cent in 2020. They are expected to rise to 70 per cent of new car sales in 2030 and 100 per cent by 2035.
Critics have warned that electric cars cannot take over from petrol or diesel until battery life improves and more charging points are installed.
But Fiona Howarth, chief executive of Octopus Electric Vehicles, which has installed more than 100,000 charging points in the UK, said: ‘The upward trend in electric car sales is painting a very clear picture – we are on the cusp of the electric car revolution, not only here but across the world. This is the biggest transition the auto industry has seen for 100 years, and offers huge opportunities for new businesses and brands. We see that drivers are open to trying new brands, and car manufacturers are in need of new components and talent in volume.’
Lord Grimstone sparked controversy last week, saying UK firms were better off under foreign ownership as they were more productive and generated more exports and jobs.
Critics warned that some overseas investors had proved themselves ‘rapacious predators’. Lord Grimstone said the National Security and Investment Act, which comes into force in January, should stop ‘harmful’ investments ‘coming in the back door’.
The Government has announced a £2.3billion fund to support electric vehicle manufacture and its supply chain, including gigafactories and charging points.
In October it will hold a summit to attract more overseas investors. Popular sectors also include offshore wind, life science and fintech, Lord Grimstone said.