Brexit, the consequences on the world of green vehicles

The UK’s withdrawal from the European Union will have profound consequences on the automobile industry and technological innovation. Car manufacturers are concerned about what will come after Brexit.

It’s an earthquake that is shaking the European Union promising to revolutionise or at least deeply change the relationship between the Old Continent and the UK. Brexit, the referendum that resulted in the UK’s decision to leave the EU, will have strong consequences on every one of the country’s productive activities. Mostly on the automotive industry, which defined the potential victorious “leave” outcome as a “nightmare” in the days leading up to the referendum. Well, their nightmare has come true.

Cameron Nissan Leaf
Ex Prime Minister David Cameron at Sunderland’s Nissan plant, where the electric saloon Leaf is built.

 United Kingdom, the pioneer of sustainable mobility

The most sold electric car in the world, Nissan Leaf, is produced in England, more precisely in Sunderland’s car manufacturing plant, in the county of Tyne and Wear. Moreover, the United Kingdom would have become the birthplace of the first models of electric Mini cars as well as the European launch pad of autonomous cars. And it’s already one of the top economic and political realities for alternative mobility, as it is demonstrated by the first “electric” highways that are fitted with a wireless electric car charging lane for vehicles that don’t have an endothermic engine, the substantial discounts on eco-friendly cars and tests on new types of fuelling systems. These strong points and activities can be questioned now and may slow down the country’s and EU’s green evolution. If on one hand people fear the reduction of public investments in technological innovation, on the other, the customs duties, taxations and industrial isolation are already threatening the United Kingdom, flooring foreign car companies that make vehicles in the UK.

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In Great Britain there is a number of leading car manufacturers including Volkswagen, Honda, Nissan, Toyota, Ford, Bmw, Mini, Jaguar, Land Rover, General Motors and Bentley.

700,000 jobs in the automotive industry

The UK is (rather, was) the second most important market in the EU. 77% of the cars produced in the country, which were 1.6 million in 2015, are exported and according to former Prime Minister David Cameron, the automotive industry, which is supported by heavy state subsidies, employs over 700,000 workers. In particular, the General Motors Group employs 35,000 people, Ford 14,000, Bmw and Nissan 8,000, Toyota 3,500 and Mercedes-Benz 3,400. In addition, six car design studios and thirteen research and development centres are operational in the nation. In the days leading to the referendum all car manufacturers said they would vote to remain in the European Union. In particular, Ford and BMW asked their employees to consider the dramatic effects of leaving the EU. Aston Martin, Volkswagen and Vauxhall (belonging to the GM Group) were the only companies that stayed more neutral, but in any case didn’t support Brexit. Now a period of growing uncertainty.

Unpredictable consequences of Brexit

Nobody can precisely predict what the impact of Brexit will be on the automotive industry, especially the environmental impact. However, Toyota warned its employees that it will raise the taxation on vehicles produced locally by 10%, while VDA, the German Association of the Automotive Industry, talked about the “risks” for the country’s one hundred production plants of German plants. The Jaguar Land Rover Group, subsidiary of the Indian automaker Tata Motors, is more concrete and estimates a potential 1.25 billion euros hit until 2020. Independently of these catastrophic previsions, car manufacturers mostly fear the financial storm hitting the Stock Market indexes of many countries across the world and its consequences in the short term on lending institutions, which most industrial groups have to do with every day, with steep losses in bond values in the car sector.

uk cars
The Jaguar Land Rover Group fears that it could take a 1.25 billion euro hit per year from Brexit until 2020.

The threat of customs duties

Basically, since the UK has left the EU, the goods it exports to Europe must be subject to export tax, cars included. Actually, this must be negotiated in the next two years, given that the English government and the European institutions will define the conditions to leave the EU. Inspite of these catastrophic previsions, the game is not over.

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