Industrial strategy is again on the UK political agenda: a Home of Commons debate is scheduled for Wednesday, nearly precisely a 12 months after enterprise secretary Greg Clark introduced the primary six applied sciences to be supported by the federal government’s new Industrial Technique Problem Fund. A type of applied sciences is batteries and Mr Clark has put in place a £246m support programme for the sector, with the primary give attention to batteries for electrical automobiles.
A part of the federal government’s motivation is to make sure that the British motor business isn’t broken because it makes the transition to electric cars. Final week’s announcement of job losses at Jaguar Land Rover, attributable to the collapse in diesel automotive gross sales, was a reminder of the business’s dependence on previous applied sciences. Concern over the way forward for the automotive business is comprehensible, however there are some questions in regards to the battery programme that needs to be aired this week, relating not simply to batteries however to the commercial technique as an entire.
For a begin, the programme appears over-ambitious. The intention, in response to Mr Clark, is to make sure that the UK “leads the world” within the improvement and manufacturing of batteries for electrical autos.
At current the availability of lithium-ion batteries — essentially the most broadly used battery kind in as we speak’s electrical automobiles — is dominated by firms primarily based in Japan, South Korea and China. These firms have a 20-year lead in battery expertise and are spending closely to remain forward. The UK has some excellent scientists in electrochemistry and supplies science, however it is going to take a collection of exceptional breakthroughs from British laboratories if Asian management is to be significantly challenged. An upbeat message from the highest is all very properly, however wishful considering isn’t useful.
A second query — and one which applies to different applied sciences that have been focused within the industrial technique — is the function of presidency funding. Given the rising importance of energy storage, each for automobiles and for the electrical energy grid, there’s a legit case for spending extra public cash on tutorial analysis on this space.
Nonetheless, there’s loads of personal sector curiosity on the commercialisation stage, each from giant firms similar to Johnson Matthey and from early-stage companies which can be growing new battery supplies; there isn’t any scarcity of capital to gas the battery sector.
As for the way forward for the motor business, the federal government’s nervousness is that, except a viable battery provide chain is established within the UK, the main automotive assemblers — all of that are foreign-owned — could determine to make their electrical automobiles elsewhere.
The federal government needs to make the UK a extra enticing location for funding in batteries and battery supplies together with, if attainable, the creation of a number of cell-making vegetation by one of many huge Asian producers. However the presence or absence of cell-making factories is unlikely to have a decisive affect on the funding selections of the automotive assemblers. Different elements, together with the longer term buying and selling relationship between the UK and the EU, are more likely to carry extra weight.
The battery enterprise is international and it’s not apparent that the UK must be represented in all elements of the availability chain. So far as lithium-ion cells are involved, provides can be found, or quickly will likely be, from three Korean-owned vegetation in Poland and Hungary. There are additionally plans for European-owned vegetation to be in-built Germany and Sweden.
These issues spotlight some common factors about selective industrial coverage. Any determination to again a selected expertise should be primarily based on a transparent rationalization of why authorities funding, past help for scientific analysis, is important. A practical evaluation of the UK’s strengths and weaknesses within the related sector also needs to be carried out. Then there’s a want for rigorous analysis — and a willingness to terminate the programme if it’s not assembly the unique goals.
Industrial technique shouldn’t be used as a car for open-ended help for favoured sectors, justified solely by the hope that at some point they could develop into world leaders.
The author, a former editor of the FT, is head of business coverage in Coverage Change. The article relies on a Coverage Change paper ‘Batteries for electrical automobiles: a case examine in industrial technique’