British and European manufacturers are slowing down production of electric vehicles because they are too expensive for the vast majority of motorists, an industry body has said.
The Advanced Propulsion Centre, which disburses taxpayer money to push the automotive industry towards a zero-emission future, said in its latest quarterly review of the market that British factories would produce 280,000 fully electric cars and vans in 2025, out of a total production of 1.1 million.
It previously forecast 360,000 battery-only vehicles to be produced out of a total one million. If correct it would mean only a quarter of UK assembly output will be electric within two years, compared with the prior forecast of more than a third.
In its report, the centre said: “An uncertain economy is expected to drive buyers towards cheaper models and reduced BEV [battery electric vehicle] production is planned on that expectation. Buyers are expected to stick with cheaper options for longer. Although BEV production is reduced, overall production is increased, with more plug-in hybrids and hybrid vehicles [both of which include petrol engines].”
This is not just a UK phenomenon, the centre said. It is now expecting electric vehicle production across Europe to be 1 million units lower than expected at 12 million, thanks to the impacts of the rising cost of living, inflation and the vehicles’ affordability. It added: “A recovery for 2030 that gets BEV production back on track is uncertain due to an uncertain geopolitical situation and potential supply issues.”
The centre has previously warned that these supply issues, especially the availability of lithium, a key ingredient in batteries, could put the brakes on the fuel transition and lead to more manufacturers looking at accelerating plans for hydrogen vehicles as an alternative.
Production of electric vehicles in the UK is at a crossroads:
• BMW has confirmed that it will halt production of the electric Mini at its plant at Cowley in Oxford, and move the entire production of its next-generation zero-emission Mini to China.
• Arrival, a start-up that is on the Nasdaq, had been planning to produce tens of thousands of electric vans and taxis at plants in Oxfordshire, but, with limited cash, it abandoned this and retrenched to the US where tax breaks and funding is readily available.
• Jaguar, based in the West Midlands, is planning to reinvent itself as a wholly electric marque from 2025. However, there has been no communication on what sort of volumes it is forecasting, and the industry expects them to be low. Plans for the electrification of Range Rovers also remain under wraps.
• Nissan produces the all-electric Leaf in Sunderland but has been concentrating on expanding production of the next-generation hybrid version of the Qashqai, the UK’s best-selling car.
• Toyota remains committed, at least in the mid-term, to producing hybrids but not fully electric cars at its Derbyshire plant.
• Stellantis, the Peugeot, Citroën and Vauxhall group, plans to begin production of electric vans this year at Ellesmere Port but volumes are expected to be low.
• Bentley and Rolls-Royce have both made commitments to go fully electric but only by 2030.
• Aston Martin’s electrification plans remain less clear.