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Why an Industrial Strategy Is Key for Battery and EV Investment

Andy Palmer, the ‘Godfather of EVs’, tells the inaugural Global Battery Value Chain Conference that countries need a corporate plan if they want to have an automotive sector in 10 years.

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By Josh Critchley
Published May 2, 2023 | 6 min watch
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Key Points

  • To build the right support for electrification from infrastructure to batteries to EV manufacture, countries need to have an industrial strategy.
  • The time to act is now, as auto manufacturers and others in the battery value chain are looking to invest over the next ten years and countries like the UK could get left behind.
  • Electrification is not only an opportunity to save the planet, it’s also a chance to rethink what cars could look like and make driving fun again.

For Andy Palmer, former CEO of Aston Martin and the Nissan executive behind the introduction of the Leaf, there’s no question that the future of automotive is electric. Palmer, who’s known as the Godfather of EVs, believes that the innovation is there to help bring EVs to the masses and maybe even create something entirely new in the process. But countries that want to be part of this future need to have governments that are supporting both the automotive industry and the infrastructure and companies behind electrification.

The importance of a corporate plan

Palmer believes that the country lacks a key element for the energy transition – an industrial strategy.

“Would you invest in shares in a company that didn't have a corporate plan? Because the UK doesn't have a corporate plan”

ANDY PALMER, FORMER CEO, ASTON MARTIN

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“The current UK government response to net-zero journey is just inept, I don't find any other word for it. The idea that you don't even know whether, as a government, you really want to support the auto industry or not. There is no industrial strategy. Let me put it like this, would you invest in shares in a company that didn't have a corporate plan? Because the UK doesn't have a corporate plan,” he said at RBC Capital Markets’ inaugural Global Battery Value Chain Conference.

“What I think that certainly China has understood, what the US has understood and reacted to through the Inflation Reduction Act, what you'll see in May in the EU reacting to that, and what you can see in India, is governments that understand that if you don't have a battery supply chain in your country, you don't make sales in your country, then you won't have a car industry ten years from now.”

Why time is running out

An industrial strategy would pinpoint which industries the UK wants to support and help join up the efforts of different government departments and drive financial support from the Treasury. Without it, Palmer fears that the UK will be too late to join the growing battery sector and will lose its automotive sector, which currently employs 800,000 people in the country.

“It's a ramp, as you know, but by 2026, 65% of the sale needs to be made locally in Europe, the longer that you're postponing the decision, the less likely it is that you'll invest in the UK, and the more likely it is that you'll invest either in EU or in the US.

“Competition means that you have to you have to artificially stimulate the market. You have to level that playing field.”

ANDY PALMER, FORMER CEO, ASTON MARTIN

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“And the fascinating part of this is that the US is now in competition with the EU. But it's also mandatory that UK government understands that the UK is now in competition with both of those players. And competition means that you have to you have to artificially stimulate the market. You have to level that playing field,” he said.

Creating the car of the future

That the car industry as a whole is embracing this change is hugely disruptive and it’s likely to alter the players in the game in the next 20 years.

“This pivot is at least as big as horse and carriage to car,” said Palmer. “There’s going to be a bunch of car companies that get it wrong and a bunch that get it right. I would speculate that the number of car companies out there will be the same, more or less, in 2050 as 2020. Just the names on the list will have changed.”

Palmer also believes that the disruption doesn’t go far enough. Electrification is an opportunity to go back to the drawing board on what a car looks like and do something really revolutionary.

“I think electric technology is interesting far beyond its objective to save planet Earth. It also has the opportunity to make driving fun again.”

ANDY PALMER, FORMER CEO, ASTON MARTIN

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“In the Nissan product plan that I was responsible for, the Leaf would have been followed by the EMA200 and then the Infinity. And the fourth vehicle was something called a Blade Glider. This was a sports car with a narrow front end and wide rear end and a McLaren F1 configuration of seats, with central steering and two passengers,” he said.

“I think electric technology is interesting far beyond its objective to save planet Earth. It also has the opportunity to make driving fun again.”

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