The UK car manufacturing industry is at a competitive disadvantage to the rest of Europe due to sharply rising energy costs, the sector warned on Tuesday.
Analysis by the Society of Motor Manufacturers and Traders (SMMT) found that the sector’s annual energy bill – which is already £50 million ($61.3m) more than its European Union rivals – will rise by £90m in 2022, a 50 per cent increase. It said the uplift in bills was equivalent to more than 2,500 automotive jobs.
It comes as the British car industry suffered its second weakest May in three decades as sales dropped by more than a fifth year-on-year. Inflation in the UK hit an annual rate of 9.1 per cent in May, a new 40-year high, after broad increases in the cost of fuel and electricity.
UK electricity prices are the most expensive of any European car manufacturing country and 59 per cent above the EU average, the SMMT said.
That means British companies could have saved nearly £50m if they were buying energy in the EU.
The additional cost of producing vehicles and components in the UK is putting manufacturers at a…