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23 Apr 23

According to a veteran of the business, the UK's auto industry may vanish unless the government follows the US and EU in assisting with the transition to electric vehicles.

Without a large subsidy package comparable to the billions in support the US is giving, Andy Palmer said it was "probable" automotive companies will leave the UK.

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The "last throw of the dice" is being thrown at the industry, Mr. Palmer, who has held senior positions at Nissan and Aston Martin, noted.

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The UK won't "toe-to-toe" with the US and EU, according to the chancellor.

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According to Jeremy Hunt, the UK's strategy for luring investment would be "better."

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Mr Palmer, who is currently chairman of the electric battery company InoBat, formerly served as Nissan's COO and as Aston Martin's CEO.

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He stated on the Today programme of the BBC that the UK's auto industry was "managing decline" but that the transition to electric vehicles represented a "last opportunity" to revive the sector and create jobs.

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However, he cautioned that substantial subsidy packages, comparable to those proposed in the US and currently under consultation by the EU, were required for companies with headquarters in the UK.

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Mr. Palmer stated that it was "not only possible, it's probable" that vehicle manufacturers now based in the UK will leave and go overseas if such programmes are not developed.

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You must either compete or control the fall of the British industry, which will eventually reach practically zero, he warned.

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"We have one more chance to save some of that industry, but if we don't, then we'll have to find alternative jobs for the 820,000 people."

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The caution follows the US's announcement of the Inflation Reduction Act (IRA), which provides US companies manufacturing greener technology with billions of dollars in subsidies and tax credits, including electric automobiles, renewable electricity, and sustainable aviation fuel.

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In response, the EU announced proposals for a Net Zero Industry Act to strengthen its green industry subsidies.

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The UK government informed the BBC that representatives were speaking with other nations "who are similarly affected" as well as the US administration "to address serious concerns" about the IRA.

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The government vowed to "remain resolute in defending the interests of UK industry."

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The most recent remarks follow Mr. Hunt's declaration that the UK will not engage in what he called "some distortive global subsidy race" head-to-head with its friends.

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Mr. Hunt promised that "our approach will be different -- and better." "Security, not subsidies, is the long-term solution as protectionism threatens to reemerge in the global economy."