British carmakers on the brink of golden age: minister reveals investors will be pumping billions into electric vehicles
- Lord Grimstone said the rise would be driven by billions of pounds of foreign investment in electric cars as manufacturers race to meet rising demand
- He said the investment in electric vehicles would boost the auto industry in the same way as the mass production boom of the 1930s to 1950s.
- Lord Grimstone revealed the UK has 3,000 potential investment deals in the pipeline across the economy
The British car industry is on the cusp of a new golden production era that will rival the production boom of nearly a century ago, Investment Secretary Lord Grimstone has said.
The former chairman of Barclays and Standard Life – who was also an adviser to Margaret Thatcher – said the increase would be driven by billions of pounds of foreign investment in electric cars as manufacturers race to meet rising demand.
He said the massive wave of investment in electric vehicles would boost the car industry in the same way it did mass production from the 1930s to the 1950s, when Britain became the world’s largest exporter of cars.
Driving force: Lord Grimstone said production surge would be driven by billions of pounds of foreign investment in electric cars
Lord Grimstone, an unpaid minister who heads the Government’s Office for Investment, revealed that the UK has 3,000 potential investment deals in the pipeline for the entire economy.
This equates to “tens of billions” of potential foreign investment in the UK over the next three years, he said, which will create a staggering 700,000 jobs over the next decade.
Topping the list for foreign investors is electric car production and the supply chain, he told The Mail on Sunday, adding: “We are on the cusp of an automotive renaissance that will take us back to the 1930s. This is a customer centric business. All automakers have had to deal with the pace at which people are switching to electric vehicles.
‘Electric vehicles will be the business model for the next 30, 50 years. If Britain gets its fair share, or more than its fair share, it will set us up completely.’
Britain overtook France and became Europe’s largest car manufacturer in 1932, led by manufacturers such as Morris, Austin and Ford. In 1950, it produced 52 percent of global auto exports, driven by demand from the US, where demand outstripped supply.
That dominance began to fade in the 1960s and 1970s, as British companies struggled to match cheaper models produced by rivals in Japan, Europe and the US. Lord Grimstone said he expected car production to return to the booming industry, it was ’50 or 60 years ago in this country’ before the decline.
He said that in addition to vehicle production, foreign investors were interested in financing the electric car supply chain, such as “giga factories” to make batteries for the cars.
Last month, Japanese company Nissan announced a £1 billion electric car hub in Sunderland. Meanwhile, Netherlands-based Stellaantis, the owner of Vauxhall, is investing £100m in building electric vans at its factory at Ellesmere Port in Cheshire. And Jaguar Land Rover will become an all-electric luxury brand by 2025, with six new all-electric models launching from 2024.
British car production fell in July to its lowest level since 1956 – to just 53,438 vehicles due to the shortage of semiconductor chips 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 that electric vehicles will account for 25% of total new car sales by 2025, up from 6.6% in 2020. They are expected to rise to 70% of new car sales by 2030 and 100% by 2030. 2035.
Critics have warned that electric cars won’t be able to take over the petrol or diesel until battery life improves and more charging stations are installed.
But Fiona Howarth, chief executive of Octopus Electric Vehicles, which has installed more than 100,000 charging stations in the UK, said: ‘The rising trend in electric car sales paints a very clear picture – we are on the brink of electric car sales. car revolution, not just here but all over the world. This is the largest transition the automotive industry has seen in 100 years and offers huge opportunities for new companies and brands. We see that drivers are open to trying new brands, and car manufacturers need new components and talent in volume.”
Lord Grimstone sparked controversy last week, saying British companies were better off under foreign ownership because they were more productive and generated more exports and jobs.
Critics warned that some foreign investors had proven themselves “predatory predators.” Lord Grimstone said the National Security and Investment Act, which comes into force in January, should prevent ‘harmful’ investments ‘from coming in the back door’.
The government has announced a £2.3bn fund to support electric vehicle production and the supply chain, including gigafactories and charging stations.
It will hold a summit in October to attract more foreign investors. Popular sectors also include offshore wind, life science and fintech, Lord Grimstone said.