On the global stage, the UK should expand its free-trade agreements for tariff-free exports of British vehicles, batteries and battery components.
Partnerships with mineral-rich countries – such as Australia, Canada and Indonesia – should also be established to safeguard the UK’s supply of the raw materials required to manufacture batteries, namely lithium, cobalt and nickel.
The UK currently has agreements in place with Australia, New Zealand and the EU, while talks with Canada, Mexico, Israel, India, the Gulf Cooperation Council, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership and South Korea are currently in progress.
Inaction could lead to industrial restlessness, added the SMMT.
SMMT chief executive Mike Hawes said: “The UK is already a significant producer of battery-electric and electrified vehicles, manufacturing zero-emission cars, vans, buses and trucks. Underpinning vehicle production across the UK is an equally diverse supply chain, one which must also make the switch.
“But that transition needs investment and for that we must be competitive, build on our strengths and match the best the world has to offer. We can’t ignore the fact that other countries and blocs are powering up their political and economic backing for their own automotive sectors. The US has announced a $2 trillion package of measures in pursuit of clean technology, including its flagship $370bn Inflation Reduction Act.