renault car factory

Carmaker alliance pours billions into electric vehicles, as UK car production tanks

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Car giants Renault, Nissan and Mitsubishi Motors have collectively pledged to invest billions of pounds in electric vehicles over the next few years. The announcement coincides with the news that the number of cars built in the UK in 2021, by all manufacturers, fell to the lowest level since 1956 as the industry suffered a “dismal” 12 months.

The French-Japanese Renault–Nissan–Mitsubishi Alliance said it will jointly launch 35 new electric vehicles over the next five years based on five common platforms, including a successor to the Nissan Micra. They also signalled a huge increase in global battery production.

Jean-Dominique Senard, chairman of the Alliance, told a news conference: “Today the Alliance is accelerating to lead the mobility revolution and deliver more value to customers, our people, our shareholders and all our stakeholders. The three member companies have defined a common road map towards 2030, sharing investments in future electrification and connectivity projects.

“These are massive investments that none of the three companies could make alone. Together, we are making the difference for a new and global sustainable future; the Alliance becoming carbon-neutral by 2050.”

Renault, Nissan and Mitsubishi have already invested billions of pounds in electric vehicles (EV). In Europe, Japan, the US and China, 15 Alliance plants already produce parts, motors and batteries for 10 EV models on the streets, with more than one million EV cars sold so far.

The Alliance announced it is accelerating this production with a total of €23bn (around £19bn) in extra investment over the next five years on electrification, leading to 35 new EV models by 2030.

The Alliance added it was working with partners to reduce battery costs by 50 per cent in 2026 and by 65 per cent by 2028. It said that 90 per cent of the new vehicle models will be based on five common EV platforms, covering most markets, in all major regions.

Meanwhile, the Society of Motor Manufacturers and Traders (SMMT) said this week that the number of cars built in the UK last year fell to the lowest total since 1956 as the industry suffered a “dismal” 12 months.

Production was down by 6.7 per cent over the year to 859,575 new vehicles, down by one-third compared with the pre-pandemic 2019 figure.

The SMMT said issues such as the shortage of semiconductors, the closure of Honda’s Swindon factory, Covid-related issues such as staff shortages, and border controls following Brexit had all negatively affected carmakers.

Factories had to reduce or pause production as they waited for parts hit by the global pandemic. High energy costs are also a growing problem for the industry, Mike Hawes, the SMMT chief executive, warned.

He said there were grounds for optimism in 2022, with a potential £4.9bn of investment announced - the highest since 2013 - and annual production numbers for new vehicles forecast to begin recovering to over one million.

The positive signs emerging from the new data showed that factories built a record number of battery electric (BEV), plug-in hybrid (PHEV) and hybrid electric vehicles (HEV) in 2021, with almost a quarter of a million of these zero- and ultra-low- emission vehicles leaving production lines, representing more than one in four of all cars made.

Four out of five new cars were shipped overseas, with the European Union being the biggest market, receiving 55 per cent of cars produced, followed by the US.

The SMMT said a significant proportion of announced investments is in support of electrified vehicles, with the expansion of existing facilities in north-east England and the proposed development of a new battery gigafactory in the West Midlands.

Hawes said there was also increased consumer demand for new cars, adding: “2021 was another incredibly difficult year for UK car manufacturing, one of the worst since the Second World War, which lays bare the exposure of the sector to structural and, especially, Covid-related impacts.

“Despite this miserable year, there is optimism. With Brexit uncertainty largely overcome, investments have been unleashed, most of which will help transform the sector to its zero-emission future.

“This is a vote of global confidence in the UK but must be matched by a commitment to our long-term competitiveness, support for the supply chain in overcoming parts shortages, help with skills and training and, most urgently, measures to mitigate the escalating energy costs which are threatening viability.”

The SMMT added that the latest independent production outlook for 2022 forecasts UK car production to increase to more than one million units, representing a near 20 per cent increase on the 2021 total, and could reach 1.1 million in 2025, with further growth beyond.

A spokesperson for the Unite trade union said: “It is heartening that investment is recovering and electric vehicle production continues to increase at pace. For this progress to be built upon and for the UK to retain its world-leading auto sector, however, there needs to be ‘hands on’ government involvement and investment to ensure the opportunities the transition to electrification presents are fully realised.

“That’s why it is essential that the government brings forward a tailored industrial blueprint for automotive as soon as possible.”

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