If we want our thriving EV market to drive investment, let’s stop tinkering with policy – Inside track

This post is by Andy Palmer, automotive engineer and and co-founder of Palmer Energy, and was originally published in BusinessGreen.

The UK automotive industry sits at a crossroads.

Over the past decade, Britain has quietly built one of Europe’s leading market for electric vehicles. That success has made the UK an obvious expansion target for global manufacturers, including fast-growing Chinese brands looking for access to advanced markets. Yet despite this strength, the Prime Minister’s recent visit to China did not yield a major automotive manufacturing deal.

That should give us pause. It underlines a simple truth about industrial investment: markets matter, but certainty matters more.

For more than a century, Britain has built cars the world wants to buy. We have combined engineering excellence with design flair, exported to every major market and supported hundreds of thousands of skilled jobs across the country. Today, however, that position is far from secure.

A defining choice for the UK
The global industry is undergoing its biggest transformation since the invention of the internal combustion engine. Electrification, software-defined vehicles and new supply chains are reshaping how cars are designed, built and sold. Governments elsewhere are responding with long-term strategies, stable incentives and serious capital. In contrast, the UK risks undermining its own strengths by constantly revisiting policies that are already working.

The uncomfortable question is this: does the UK genuinely want to remain a car-building nation?

If the answer is ‘yes’, then fixing the fundamentals of competitiveness has to come first. Energy costs in the UK remain significantly higher than in many competing markets. Automotive manufacturing is energy-intensive, particularly battery production. Without affordable, reliable power, investment will simply flow elsewhere. A targeted industrial energy tariff for strategic manufacturers would be a practical place to start.

We also need a structure of central government that facilitates the co-ordination of automotive and related activities. In essence, a minister who can work across government departments to executive an automotive industrial strategy supported by energy, business and transport needs.

Battery supply is the next pillar. Electric vehicles are only as local as their batteries. Without large-scale gigafactories on UK soil, we risk becoming an assembly outpost rather than a full manufacturing ecosystem. That has consequences for jobs, resilience and trade rules. Support for domestic battery production needs to move faster, from planning reform to capital grants, and at a scale that matches our ambitions.

Above all, we need regulatory stability. Carmakers plan on ten-year horizons. Repeated reviews of targets, incentives and compliance frameworks create uncertainty that deters investment, even when the direction of travel remains broadly correct. A clear, credible roadmap for the transition to zero-emission vehicles, aligned with infrastructure rollout and consumer incentives, would give industry the confidence to commit capital in the UK.

Skills also demand serious attention. Electrification and software are reshaping the workforce profile of automotive manufacturing. Retraining, apprenticeships and STEM education need to be coordinated nationally and tied directly to the needs of future factories. Other countries are already doing this at pace. We should be as well.

Finally, government must treat automotive as a strategic sector. Countries that succeed in this transition are those where political leadership actively champions industry, convenes supply chains and removes barriers to investment. That requires consistency, faster decisions and a willingness to compete globally for capital, not periodic second-guessing.

The power of policy certainty
I have spent decades in this industry, including leading major manufacturers. I have seen how quickly momentum can be lost and how powerful it is when government and industry pull in the same direction.

The UK still has extraordinary strengths: world-class engineers, respected brands, deep motorsport heritage and a highly capable supply base. But strengths alone are no longer enough. The transition to electric and digital vehicles is also a race, and right now we are at risk of slowing ourselves down.

This is about future prosperity, regional growth and technological leadership. Automotive anchors advanced manufacturing clusters, drives innovation and supports high-value exports. Allowing policy uncertainty to erode that position would be an avoidable mistake.

So the question remains. Does the UK want to still build cars in a decade’s time?

If the answer is yes, ministers need to prove it by backing what works, providing certainty where it counts and committing to a clear industrial vision. The window is still open. It will not remain so indefinitely.

Photo by Denin Lawley on Unsplash