'Britain's car industry is at a crossroads, with hundreds of thousands of jobs at stake'

Jaguar's relaunch as an all-electric car maker comes amid big changes for the auto sector - not least a major challenge from cheaper Chinese models - as part of a seismic shake-up across the wider industry

Iconic car maker Jaguar has unveiled a radical relaunch - part of a seismic shake-up across the wider industry.

Jaguar’s Type 00 concept car is designed to set the tone for the legendary British marque’s all-electric future. Bosses are desperate to shed its older “Jag-man” image and appeal to younger drivers. A production version is expected to cost more than £100,000.

But the model’s ‘Barbie pink’ colour was mocked by some, while others branded a pre-launch advertising campaign - minus any car - “woke”. The reset for Jaguar - famed for its classic E-Type - comes amid a electrification revolution for the whole of the car industry.

Pressure to cut carbon emissions - in some countries backed by the threat of fines - has seen manufacturers ramp-up investment in electric vehicles. But the extra outlay for battery electric cars, plus “range anxiety”, has dented demand from buyers. At the same time, Western manufacturers are facing intense competition from cheap Chinese cars, helped by state aid.

Financial difficulties at Vauxhall owner Stellantis, and boardroom tension over the switch to electric, saw group boss Carlos Tavares abruptly quit this week. Vauxhall last week announced the closure of its Luton van factory, blamed in part on Tory-triggered electric targets. Meanwhile, workers at Volkswagen factories across Germany have begun strikes after the manufacturer threatened to close plants amid falling demand and a slower-than-expected move to electric vehicles.

Automotive industry veteran Andy Palmer predicted buyers could see the price of electric cars come down to those of petrol and diesel cars by 2030, if the government sticks to rules that have been slammed by manufacturers. “The breakthrough, particularly for your readers, will be on charging costs, when they will be much cheaper to run”, said Dr Palmer, a former boss of Aston Martin who, when at Nissan, was responsible for bringing the eco-friendly Leaf to its Sunderland plant,

He warned the industry “invest or die”, as he urged manufacturers and their investors to swallow several years of heavy losses in order to bring down the cost of electric cars to a level most people can afford.

“We all think big car companies make lots of money, but actually you only make a few hundred quit on every one you sell,” he said. “Most of the money you make is on spares, and servicing and car finance.”

Dr Palmer has been critical of the Conservatives for “neglecting” the UK’s car industry over 14 years in power, allowing international competitors to “overtake us.” Writing earlier this year, we welcomed Labour’s promise to back the sector, but is now urging ministers to go further with incentives for buyers to switch to electric.

He warned Chinese makers such as BYD and MG - bought by Shanghai Automotive Industry Corporation in 2007 - were now “starting the eat the diner” of Western and Japanese car giants. Their arrival has been compared to that of Japanese car makers in the 1980s. Dr Palmer said Chinese electric cars were now as good as those from the West, adding “it’s not cheap s**t anymore. It’s really good. And in battery technology, they are 10 years ahead of us.”

Comment by Graham Hiscott

Europe’s car industry - including the UK’s - is at a crossroads.

Manufacturers have sunk billions into electric cars but aren’t yet seeing a return on their investment, hammering profits. Meanwhile Chinese makers - with state subsidies - are flooding the market with cheap (and experts say very good) models, much like the Japanese did in the 80s. Holding ordinary buyers back is the price of electric cars, and “range anxiety”. Until costs fall - and they’re starting to thanks to big discounts - going electric will only be those with money to spare.

The very real risk the UK - whose car making sector is a shadow of its former shelf - will be overtaken again, especially without battery making gigafactories. That means most reliance on imports and potentially hundreds of thousands of job losses.

Q: What’s the UK market for electric cars?

A: Almost 300,000 new battery electric vehicles (BEV) were sold in the first 10 months of this year, up 14% on the same time in 2023. But that’s out of 1.65 million cars, with nearly 890,000 petrol. Even then, most EV sales are to companies or through salary sacrifice schemes. Buyers are beginning to get more choice, with over 125 BEV models. The Society of Motor Manufacturers and Traders says around one in five are cheaper to buy than the average petrol or diesel car.

Q: What are the advantages of going electric?

A: Aside from the green credentials - which some critics question - EVs also cost less to service and maintain than petrol cars. Pure electric cars are exempt from vehicle excise duty - road tax - but that will ends next year.

Q: So why aren’t sales higher?

A: While prices are coming down, electric cars still come with a premium, typicallydue to the cost of the batteries. The average new electric car costs £46,000, with the best-selling Tesla up to £60,000. A typical new car in the UK - including petrol and diesel - is £19,000 to £32,000.

Another factor holding back sales is “range anxiety” - the fear of running out of charge. In reality, the average UK journey is just eight miles and range between charges is improving. There are around one million places to charge a car, with the vast majority in homes and business premises. As of July, there were just 65,000 public electric vehicle charging points.

Q: What’s in it for car makers to boost electric car sales?

A: The UK’s Zero Emission Vehicle (ZEV) mandate requires that 22% of new cars sold in 2024 be zero-emission vehicles this year, rising to 28% in 2025 and then continuing. Manufacturers face fines for missing the targets.

The SMMT forecasts 363,000 battery electric cars wil be sold this year, giving a market share of 18.7%. The forecast for vans is just 20,000 - a 5.7% market share against a 2024 target of 10%. The trade body says sales have fallen short despite an estimated £4billion worth of discounts. Missing the ZEV target could, it adds, potentially create a £1.8billion bill, either in fines or buying credits from competitors, most of whom manufacture their EVs abroad.

Q: What does the industry want?

A: A better charging infrastructure and an end to VAT on public chargers.