UK urged to expand trade for EV supply chain

To ensure that British-made electric vehicles (EVs), batteries, and battery parts can be exported to international markets tariff-free and to sustain the nation's industrial potential, a recent study by SMMT suggests that the United Kingdom needs to expand and enhance its free trade agreements.

Published

March 2023

Industry

Electric Vehicles

The study highlighted that while the UK has small reserves of lithium and graphite, it would not be enough to meet the nation’s ambitions or capabilities. Additionally, major car producers in Europe such as Germany, Spain, Slovakia, and the Czech Republic were mentioned as lacking self-sufficiency in essential raw materials.

Cobalt is largely mined in the Congo and Australia, nickel in Indonesia and Russia, and lithium primarily in Australia and Chile. Up to 90% of essential minerals in the world are refined and processed in China, which has the largest capability for doing so. However, the fossil-heavy energy mix in China results in high embedded carbon levels in the refined materials.

The study underlines the need for the UK to continue growing its network of trade agreements and alliances with nations that have abundant natural resources to support the industrial transformation. To achieve outcomes that benefit both local populations and British businesses, the government should encourage British investors to build new mines using environmentally friendly methods and offer technical assistance in partner nations.

The study also encourages the UK to make it easy for remanufactures to import cores and used powertrains duty-free, treat or recycle them locally, and export finished products to free trade agreement partners.

To increase international commerce and export potential, the UK needs to establish a broad, secure, and robust minerals supply chain. The government must engage in global resource diplomacy to ensure that UK businesses can obtain crucial raw materials from a reliable supply chain, which would also help to lower carbon emissions.

Source: Race to zero: powering up Britain’s EV supply chain | SMMT