Batteries for electric cars: a case study in industrial strategy

Abstract

In 2017 the British government announced that, as part of its industrial strategy, it would contribute £246m to the development of clean and flexible energy storage. The main focus would be on batteries for electric cars, a sector in which, the government hoped, the UK could become a world leader. The two principal drivers of the programme were, first, the need to reduce carbon dioxide emissions by encouraging demand for electric cars, and, second, the fear that without a viable battery supply chain in Britain, the UK-based car assemblers might choose to make their electric cars elsewhere and perhaps even move all their operations outside the UK.

The purpose of the paper is to assess the rationale for the battery programme, taking account the competitive situation in the world battery industry (which is dominated by Asian producers) and the current weakness of the UK battery sector. The paper raises questions about whether the government’s ambitions in this field are realistic, and considers the implications of the battery programme for industrial strategy as a whole. 

 

Bio 

Sir Geoffrey Owen is head of industrial policy at Policy Exchange. Much of his career has been spent as a journalist on the Financial Times, which he joined in 1958. He left the FT between 1969 and 1973 to work for the Industrial Reorganisation Corporation and later for British Leyland Motor Corporation. He returned to the paper in 1973 and served as deputy editor and editor before leaving in 1990 to work at the London School of Economics. He served as senior fellow in the LSE’s Department of Management, teaching in the area of corporate strategy and international competition. He retired from the LSE in 2016 and joined Policy Exchange in the following year. His books include “From Empire to Europe: the decline and revival of British industry since the Second World War” (HarperCollins 1999), “The rise and fall of great companies: Courtaulds and the reshaping of the man-made fibres industry” (Oxford 2010), and “Science, the State and the City: Britain’s struggle to succeed in biotechnology” (Oxford 2016), written jointly with Michael Hopkins.