Polestar’s new UK base is part of a growing trend of foreign EV manufacturers placing faith in the country’s fast-developing EV industry. By Christopher Dyer
The UK’s electric vehicle (EV) market is rapidly expanding, with infrastructure and financial support increasingly encouraging more EV brands to set up shop on UK shores. Manufacturers such as Rimac and NIO have already began building a presence, placing divisions of their research and development (R&D) facilities in Warwickshire. With departments in other key markets, it indicates increasing interest in what the UK industry could offer. Polestar is the next big-name brand to follow this trend, announcing its intention to invest in a manufacturing facility in the Midlands to develop and produce a chassis for its new flagship Polestar 5.
Thomas Ingenlath, Polestar Chief Executive, was keen highlight the value its new facility could have for the company in a statement on the new facility. “Our UK R&D department is one of Polestar’s most valuable assets.” The mixture of engineering and technological understanding has ensured Polestar remains competitive, and able to “develop advanced, lightweight sports car technology that embraces innovative engineering.”
Thomas Ingenlath was keen highlight the value its new facility could have for the company
Polestar’s decision illustrates why the UK has become increasingly influential in the EV industry, and with one of the fastest growing infrastructure networks in Europe, why it’s an increasingly profitable investment area for EV businesses. The UK also possesses one of the best knowledge bases for the European EV industry, with many racing and design facilities on UK soil. With continuing government support for EV manufacturers and component suppliers, Polestar is part of a new influx of manufacturers looking for UK expertise.
Infrastructure
Infrastructure is a critical component to understanding why EV manufacturers are looking to the UK for answers. During the pandemic, the UK saw the biggest rate of development for its charging network, with over £950m(US$1.29bn) invested into new rapid charging infrastructure alone. A report on approaches to enabling EV adoption by UK energy regulator Ofgem says that strategic investment into EV infrastructure during the pandemic has encouraged more EV adoption and brand interest. The study comments that: “increasing charging infrastructure has the beneficial effect of reducing EV range anxiety and improving consumer confidence,” enhancing manufacturer confidence as a result.
Europe has also looked to develop its infrastructure and EV charging capabilities but remains significantly behind UK efforts. Germany for instance, committed to investing a combined €500m(US$561m) in April 2021 as part of a broader investment bill. This saw funding for home and work based EV charging capacity double, as well as a commitment to encourage fleet business towards electrification. Despite this, the Federal Statistics Office of Germany say that just under 26,000 public chargers are now available for EVs. Comparatively, the Office for National Statistics has suggested that over 28,000 public chargers are now operational for UK drivers.
During the pandemic, the UK saw the biggest rate of development for its charging network
The government has also pressed ahead with measures aimed at strongly encouraging consumers towards EVs. New tax legislation and low emission zones penalising ICEs has meant more financial support for EV infrastructural investment. Society of Motor Manufacturers and Traders figures forecast additional proposals to standardise UK EV charging could encourage further EV adoption. By 2035, 55% of vehicles would be zero-emission alternatives, it says, with Mike Hawes, SMMT Chief Executive, saying that this would “ensure road transport delivers its part in the UK becoming the first major nation to be net zero.”
Fast developing infrastructure and growing trends toward full EV adoption make the UK optimal for manufacturers, looking to evaluate the impact of future infrastructure on new EV models. To some degree, the market is seen as a test bed for EV deployment.
Industry knowledge
The UK’s automotive pedigree has been another key factor encouraging more EV manufacturers to invest in UK facilities. Central to this is the increasing financial support, used to train workers and ensure factories efficiently transition toward EV manufacturing. Stellantis, for example, has confirmed a £1bn (US$1.35bn) investment into the UK industry, to help accelerate the conversion of existing factories owned by Nissan and Vauxhall to be EV manufacturing ready. Europe’s transition to EV manufacturing is equally as swift, with Stellantis also investing heavily in ensuring Peugeot and Citroen are mass EV production ready. VW has been the forerunner in EV factory conversion, however. With the German brand’s plants in Zwickau and Wolfsburg already mass producing its ID models, Germany remains the market leader in Europe.
Increasing investment in education has precipitated a growth of experienced workers in the UK industry, many whom have worked on EV manufacturing and development projects. A Faraday institute study into the UK’s future EV infrastructure forecasts over 78,000 new skilled jobs in the EV sector coming to the UK market but suggests that over 110,000 workers will make the shift from internal combustion engine (ICE) production to EV development.
The shortfall in available jobs means more skilled workers will be available as manufacturers like Polestar expand their UK operations, seeking to capitalise on this abundance of experienced workers for their new factories.
UK government support for manufacturers
Ensuring financial and logistical stability is vital to sustaining the EV industry’s high production output. With component shortages continuing and high production costs increasing, the UK government’s economic and industrial support for new businesses focuses on mitigating these problems. The UK’s 2021 Autumn Treasury budget earmarked £800m for EV business development, on top of the £950m already invested in infrastructure. Rain Newton-Smith, Chief Economist at CBI, says that increasing investment into the UK EV industry puts its economy on “a strong footing, remedying challenges of under-investment and skills shortages.” Newton-Smith adds this would ensure new markets and manufacturers continue to invest in the UK economy, providing opportunities for “higher growth” in decarbonising industries.
This rationalises why the government has encouraged more domestic automotive manufacturers to consolidate their dependency on extensive supply chain links. By investing in projects such as the West-Midlands Gigafactory which looks to bring current EV component production to the domestic market, as well as providing subsidies for EV manufacturers such as Nissan to shift to on-site battery and chip development, it will create a more cyclical manufacturing process. This would mean fewer supply chain and financial-based constraints on vehicle production, driving cost down for consumers as a result.
The government has already earmarked £800m for EV business development, on top of the £950m already invested in infrastructure
Jimmy Herring, Chief Executive at EcoBat, suggests this is the next stage in EV development, both in the UK and Europe. “As cyclical manufacturing structures become the norm, we’re going to see further investment in closing supply chains,” he said. With government investment in EV infrastructure increasing and programmes aimed at transforming the UK’s dependency on international supply chains, the UK economy is adopting a more future-focused approach to EV development. Similarly, the EU is increasingly seeing governments adopting more stringent measures to condense supply chains and increase domestic industrial production for EVs.
Polestar’s attitude reflects this, with more R&D facilities emerging across increasingly important markets for EVs in Europe. As investment in new markets increases, Herring suggests that businesses like Polestar will see greater return on investment and higher profit margins as a result.
Keyword: Polestar next big EV brand to develop vehicles in UK