Is the UK’s Automotive Strategy Flawed?

What an insightful read, the Electric Vehicle (EV) battery imports the US made last year was in the BILLIONS! Which got me thinking, what would happen IF that supply chain broke, as we have witnessed recently with the pandemic (PPE) and the Ukraine war (energy).

No sooner had I drafted this missive leading wtih the above stimuli, than I read that the EU is planning a U-Turn on its EV strategy for the block. Could we be seeing some sanity prevailing and of all things being led by the EU, perhaps the most protracted and bureaucratic institution for efficient decision making. 

The hanging question is whether the UK Labour Government will reflect on its own fanaticism with a flawed green agenda and continue to press ahead with the UK combustion engine sales ban by 2030. Or with their predilection to selling UK citizens back into the EU without consent, one duplicitous step at a time, will they spin again and adopt the EU pragmatic relaxations? Afterall the Labour Party leadership have been sycophantic for anything that can pull the UK back into the EU. 

Whilst the EU rational may be a result of the automotive sector lobbying for valid commercial reasons, my personal view is there is a whole national security dimension that is being missed.

On initial inspection it looks like UK’s transition to electric vehicles is built on a fragile foundation, a global supply chain dominated by a handful of countries with near-monopoly control over rare earth minerals and battery manufacturing.  As I infer above, the pandemic exposed what happens when the world relies on single points of failure with the Protective Equipment shortages which was less a lack of masks, but a lack of accessible supply. The invasion of Ukraine by Russia exposed the European energy security risks of over-dependence on external pipelines sources. I would suggest EV batteries sit at the intersection of both lessons, strategic minerals and strategic energy.

Rare earths such as lithium, cobalt, nickel and manganese are concentrated in very few jurisdictions, many of which have tight export controls or vertically integrated industrial strategies. China refines around 60 – 70% of the world’s lithium and over 80% of the cobalt supply chain. If access were restricted, whether due to geopolitical friction, sanctions, conflict or internal policy, UK automakers would not simply slow their EV lines, they could face an immediate production shock.

How long could the UK car market last if battery imports stopped? Current industry stockholding is measured in weeks, not months or years. Automotive just-in-time production maximises efficiency, not resilience. The domestic capability to refine rare earths or build cells at scale is embryonic at best. A sharp supply contraction could empty forecourts, collapse EV production and push the market back toward combustion platforms simply because they are buildable with domestic or diversified supply lines.

This raises a pragmatic question of critical national infrastructure, should the UK maintain a mixed drivetrain strategy? The naive pursuit of net zero that is currently being forced on the UK does not require a strategic gamble on a single technology with fragile supply chain sources. Maintaining combustion engines, especially synthetic fuels, hybrids and hydrogen, offers continuity, redundancy and market stability. Energy transitions succeed when they are resilient, not ideological.