Discover more from The Fast Charge
‘Giga Britain’? Is Elon Musk close to picking the UK for new plant
The latest news from the world of EVs
Good morning, I’m Tom Riley and welcome back to The Fast Charge, a British EV newsletter.
In today’s edition… some thoughts on the upcoming Autumn Statement, including asking the question of whether Tesla could be close to picking the UK for its next gigafactory. Elsewhere, a few other top stories from the past week.
As ever, if you have any thoughts or ideas, please do get in touch. To do so, simply reply to this email.
Autumn Statement: What could the EV sector expect?
Background: This Wednesday at midday, Chancellor of the Exchequer Jeremy Hunt, will deliver his Autumn Statement. Based on reporting, it seems the government may be inclined to make a favourable announcement to support people’s incomes – albeit the Chancellor is seemingly keener on a business tax cut. But what could it hold for the EV sector?
As a reminder… Last year, at Autumn Statement 2022, one of the announcements Hunt made was about Vehicle Excise Duty, saying that from 2025, electric vehicles will not be exempt from paying it anymore. Likewise, he revealed an increase in company car tax for EVs by 1% year-on-year for three years from 2025 – going to 3% initially in 2025/26.
What to expect? If it were a car, Autumn Statement would be a plug-in hybrid – not really a full Budget with rafts of policies, but not just a quick update on the finances either. As such, we can expect several policy changes. These will be particularly important for Hunt (and Sunak too) as right now the Tories are a bit disunited at the edges – which is the opposite of what No10 wants as we head towards an election. Hence the new pledges from Sunak this week.
EV policies? Having previously endured about eight fiscal events during my time in Whitehall, if I learned one thing, it’s that making policy predictions is a bit like the Grand National – the favourite rarely wins. But, in any case, here are my four EV thoughts…
1. Supporting EV affordability
One of the areas that carmakers and others across the EV spectrum have continued to call for is support for vehicle affordability. The Society of Motor Manufacturers and Traders now regularly highlights that fewer private people (outside company schemes) are buying EVs without incentives in place. I think it’s unlikely, but perhaps we could see some help for people return. To me, what would make the most sense is if the VED and company tax changes announced last year – before the government pushed back the 2030 date to 2035 – were equally pushed back so it’s all aligned.
2. New money for EV battery development
While the UK struggled for a long time to get gigafactories off the ground, there has been recent success, such as with Tata’s investment to build a plant in Somerset. However, this project – and others – all use money from the Automotive Transformation Fund. According to the BBC, this fund (which totals nearly £1.2 billion) is now all pledged away, so it was briefed by the Treasury that the Chancellor will top it up with ‘hundreds of millions’. Last Thursday, this was seemingly confirmed, as the policy got its own pre-launch, as the Treasury revealed £4.5 billion in funding for British manufacturing.
3. Announcement on UK-EU tariffs
One of the ongoing sagas in the auto industry has been that, from 1 January under the Brexit agreement, new 10% tariffs will apply to UK and EU carmakers who cannot source their EV batteries from within Europe. SMMT recently suggested that, without a solution to this problem, the price of EU-made electric cars in Britain would increase by £3,400, while the price increase on cars going to the EU from the UK would be £3,600. Not to mention, it could impact jobs. Only recently, the Trade Secretary, Kemi Badenoch, said she was positive of a solution but, if the EU doesn’t agree to one, then the UK would create its own rules of origin agreement. Could this be something the Chancellor commits to, adding pressure to the EU as the January date approaches?
4. UK government and Tesla reveal ‘Giga Britain’
In the BBC article about attracting new factories from overseas, one of the companies mentioned that the UK is hoping to attract is Tesla. And, as this briefing will have come to the BBC’s Business Editor, Simon Jack, straight from senior Treasury sources, I’m taking that to mean that Elon Musk’s decision of where to build his next European plant is still very much in flux.
Background: You may recall, over the Summer, Musk made a big visit to Emmanuel Macron in France – who hosted him at the Elysee Palace – which many concluded showed Tesla would likely build its next factory in the country - Tesla already have one in Germany. At the time, Musk told French reporters: “There’s no announcement today, but I’m very impressed with President Macron and the French government and how welcoming they are to industry…. I’m confident that in the future Tesla will be making significant investments in France.”
However… Has Rishi Sunak managed to win over Elon Musk? The government has long been trying to charm Tesla to choose the UK for their next site, including with grants and cross-Whitehall support, though Musk was said to be a bit worried about Brexit implications – but if they went away, maybe not a problem, likewise I’m sure the new £4.5bn doesn’t hurt either. In May, Musk said Tesla’s new site would likely be chosen “towards the end of this year.”
Bromance… Elon Musk has been in the UK only recently with the Prime Minister. The Tesla CEO attended the AI conference at Bletchley Park, and Sunak also conducted an interview with him where they both seemed to get along very well.
During that chat… there was a conversation on running a business (being comfortable with failures etc.), and in his response to Rishi, Elon also said: “I don’t quite know how it works in the UK, probably better than continental Europe” before talking about having a good environment such as on stock options, and suggesting that with high risk should come high reward – to which Rishi joked in response “I think that was a very soft pitch for a tax policy, Chancellor”. Musk also posted earlier this month, in response to a picture of them both, “I know he is not popular among some of the public, but I was very impressed with Rishi Sunak – he is an asset to the UK.”
So… Perhaps the Autumn Statement – or at least close after it – could be when an announcement is forthcoming? There have certainly been whispers for years that it’s in the works. Today, in The Guardian, a spokesperson for the Department for Business and Trade said on the need for gigafactories, in response to a new Business Committee report, “Later this week we will publish a wide-ranging advanced manufacturing plan and the UK’s first battery strategy, both of which will ensure we continue to place the UK at the forefront of global supply chains.” I’ll be tracking Elon’s jet here.
Top EV picks last week…
👨 Last week there was a reshuffle which led to some changes at the Department for Transport. It’s now been confirmed that the new minister for EVs is in fact Anthony Browne MP. See last week’s newsletter for a short biography about him.
🚚 Arrival, the UK-founded EV start-up, is officially on the brink. It finally shared last week that it secured a $50 million loan so it can explore a sale. If not, the company looks to go under. According to Companies House updates, the original founder, Denis Sverdlov, has now ceased having significant control of the company.
🔌 I’ve written before about EV chargers being sold second-hand, and over the weekend I spotted some Pod Point destination chargers for sale. Only £250 a pop!
⚡ Mercedes last week revealed its first ultra-rapid charging hub in Georgia, US. It’s the first of 400, and I believe some similar looking ones should be coming to the UK before 2030.
✍️ Cornwall, a region that sees its population swell by millions of tourists annually, has a consultation out on its EV strategy. Respond here.
⚒️ Interesting video by the FT highlighting the worldwide race for lithium. See here.
❤️🔥 The Guardian has kicked off a new series of articles on myths versus realities about EV ownership – the first one is about fire risks. See here.
By Tom Riley | Check my Linktree for LinkedIn, Twitter and TikTok