The UK car industry has demanded action from the government after revealing it is facing a £90 million energy hike. The Society of Motor Manufacturers and Traders (SMMT) says the sector urgently needs government assistance to help it deal with a “50-percent” rise in energy costs this year.

According to the SMMT, the UK car industry is already spending £50 million a year more on energy than its EU counterparts, with “some of the highest energy costs in Europe”. Energy costs have been increasing worldwide amid the war in Ukraine and recovery from the coronavirus pandemic.

In a new document entitled From Full Throttle to Full Charge, the SMMT has set out a roadmap for the coming months and years, creating what it calls a “fresh roadmap… with a clear vision of the sector leading the push to net zero”. To help the industry achieve that goal and remain competitive, the organisation has asked the government to meet a handful of key “asks”.

First electric van prototypes in build at LEVC

Firstly, the SMMT has called for “urgent action” to support businesses facing substantial energy price hikes, as well as asking the government to focus on skills and training. According to the organisation, at least 22,000 jobs are currently dependent on internal combustion engines in the UK automotive sector, and it is concerned that “jobs and skills… may not be transferable” to electric and hydrogen-powered vehicles.

The SMMT has also asked the government to “deliver a globally competitive business [and] investment environment”, by providing support to businesses and favourable trading conditions. In the same vein, the SMMT has asked the government to fully implement the UK-EU Trade and Cooperation Agreement, which was signed last year, and to “prioritise UK automotive in trade policy and future free trade agreements”.

Mini Oxford plant

“From Covid impacts to component shortages, supply chain disruption to trade uncertainty, and regulatory change to rising inflation, the challenges facing this sector are immense,” said SMMT chief executive Mike Hawes. “Nevertheless, addressing the UK’s high energy costs is the industry’s number-one ask.

“Help with energy costs now will help keep us competitive and be a windfall for the sector, stimulating investment in innovation, R&D, training – all reinvested in the UK economy. With the right backing this sector can drive the transition to net zero, supporting jobs and growth across the UK and exports across the globe.

“Our plan, From Full Throttle to Full Charge, sets out how industry can work with the government to build a UK automotive ecosystem fit for a zero-emission future. If there is the will, the effort and the action from the government, they will find it matched by that of the UK industry in investment and competitiveness.”