Weekend Cars: Steady Increase In Car Production; But Are Electric Vehicles Really The Way To Go?
Image by Gerd Altmann from Pixabay
Richard Bartlett-Rawlings, partner and automotive specialist at RSM, writes: ‘It’s good to see another year on year increase in UK car production in April 2021; however, this is unsurprising as the global pandemic stopped production this time last year. The most concerning data is the reduction since March this year, caused by a lack of components including semi-conductors. Mini and Jaguar Land Rover have already temporarily reduced production; and many manufacturers are either slowing production or rationalising portfolios to focus on more profitable models to conserve existing supplies of microchips.
‘What seems like a small supply issue is having an acute concertina effect on the whole car industry, as the limited availability of news cars is causing a significant uplift in demand for used cars – showing that consumers are not willing to wait for production to get back to pre-pandemic levels.
‘However, if the supply issues continue over the longer term; it will become increasingly more difficult for the UK to meet ambitious targets to transition to zero carbon vehicles and also lower emission hybrids.
‘Although the number of new registrations for electric vehicles continues to rise, it still only equates to 10 per cent of the market, demonstrating there is a long way to go; and the incremental cost over internal combustion engines (ICEs) could be holding back growth. A lot rides on achieving price parity, but the level of innovation that goes into EVs and demand for key elements, such as lithium, is likely to keep the price point high for some time yet. The Government may have to up the level of support it offers to those looking to change to make it more attractive.
‘So, are EVs the way to go? Mining a finite resource to make a lithium battery and then disposing of it ultimately has a negative impact on the environment, so are we just swapping one pollutant for another? Maybe the real focus needs to address the future of mobility and how we reduce the number of journeys made?’