The government’s target of banning the sale of petrol and diesel vehicles by 2030 is likely to come under severe pressure unless supplies of the raw materials required to construct batteries are secured urgently, according to a recent report from the House of Lords Science and Technology Committee.
The report recommends that further incentives be introduced to encourage lithium mining in Cornwall, and that special agreements be signed to secure the supply of other crucial raw materials like cobalt from overseas.
The Science and Technology Committee sought to play down the government’s uplifting rhetoric about the future of any British electric vehicle industry, and to focus instead on hard facts.
Many in the British automotive industry already fear that Britain is falling behind key competitors.
“There was a stark disconnect between the optimism of ministers and officials that UK industries can transition in very tight timescales, and the concerns of our other witnesses that the UK is far behind its competitors and faces significant challenges with innovation, supply chains and skills,” the report says.
The government is investing heavily in providing public support for gigafactories, but a crucial new regulation, due to come into force in 2027, requires that 55% of a car’s value must originate in the UK or the EU to avoid tariffs.
And this might prove to be impossible, if the basic raw materials for the batteries need to be sourced elsewhere.
“Without the necessary UK supply chains, manufacture will move to the EU,” the Science and Technology Committee said.
Domestic battery production is central to vehicle manufacturing, since storage and transport from a gigafactory to a production line substantially raises costs.
That’s why the government is already providing a certain amount of support for companies like Cornish Lithium and British Lithium Limited, and both these companies haven’t been shy of trumpeting the help they are getting from British officialdom.
Grants have been forthcoming readily easily, and there could be more to come. Whether the Lords think that it will be enough is another matter. But for investors in the UK lithium sector there could hardly be a more favourable regulatory backdrop.
Cornish Lithium and British Lithium could well end up having a crucial role in ensuring the ongoing survival of the UK car manufacturing industry.