Battery-operated Cars and the UK's Journey to Zero Emissions

Battery-operated Cars and the UK's Journey to Zero Emissions

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The UK auto sector is at a crucial juncture as it navigates towards a future led by electric vehicles (EVs). The Zero Emission Vehicle mandate, taking effect in 2024, requires 22% of all sedans sold to be zero-emission vehicles, with 10% for LCVs. This legal push is anticipated to considerably increase the market share of BEVs (BEVs), in spite of existing challenges such as high manufacturing costs and low profits for manufacturers​ (Grant Thornton UK LLP)​​ (EY)​.

Nonetheless, the sector is not without its hurdles. Sales of BEVs have recently experienced a decrease, in part due to the upcoming regulations and the financial burden they place on producers. Firms are implementing approaches like giga casting to reduce production costs. Giga casting, currently utilized by Tesla and several Chinese producers, eases the production process by forming major portions of the automobile, which reduces both complexity and costs​ (Grant Thornton UK LLP)​.

Despite these advancements, the industry faces a delicate balance. Higher inflation and interest rates, alongside evolving battery technologies and potential automobile industry duty changes on non-EU BEVs, cause market instability. However, the adherence to renewable energy and innovative manufacturing processes provides a promising outlook for the UK's automotive industry as it shifts to a more environmentally-friendly system​ (Grant Thornton)​​ (EY US)​.