UK car industry body calls for urgent response to US, EU plans

By Nick Carey

LONDON (Reuters) - Britain risks falling behind in the race to build electric vehicles (EV) if it does not respond urgently to large-scale U.S. and European Union initiatives to support industry, the UK's auto industry body said on Monday.

"Britain's ability to compete as an EV production leader is at risk unless government responds urgently to increasingly fierce international competition," the Society of Motor Manufacturers and Traders (SMMT) said.

The United States last year announced $369 billion in subsidies to support clean technologies and electric vehicles under the Inflation Reduction Act (IRA). That was followed up by the Green Deal Industrial Plan proposed by the EU last month on concern the U.S. law could put companies based in Europe at a disadvantage.

In a report titled "Race to Zero: Powering Up Britain's EV Supply Chain," the SMMT lays out a series of initiatives that it sees as necessary to help Britain's carmakers compete.

British Prime Minister Rishi Sunak said last week he was talking to the United States and European Union about the IRA amid concern it could make European markets uncompetitive.

Concerns have been rising within Britain's car industry over the lack of major EV battery plants, without which many fear vehicle production will shift to the EU. So far, only Nissan has announced it will build a battery plant in Sunderland, while dozens of plants have been announced, or are under construction in Europe.

Last month Carlos Tavares, chief executive of world No. 3 carmaker Stellantis, said Britain's car industry would be "in trouble" without UK-made batteries.

The SMMT's recommendations for making Britain more competitive include providing more generous incentives and subsidies for battery-related projects, cutting energy costs, streamlining planning approval for battery production, and expanding the country's free trade agreements.

"With other parts of the world turbocharging their support for the zero-emission vehicle transition, we need to step up to compete in this global race," SMMT CEO Mike Hawes said in a statement.

(Reporting By Nick Carey; Editing by Sharon Singleton)