Sustainable investment group calls on government to provide ‘greater clarity’ on plan to decarbonise transport

It said this is due to what it described as the government’s “inconsistent and opaque” approach to public-private engagements in regard to gigafactory investment. UKSIF added that unless the UK can provide a clear process for investors, it will continue to fall behind and be unable to compete on the global stage for battery production.

UKSIF brings together over 300 members, managing over £19tn in global assets under management.

CEO James Alexander said: “A lack of clarity and certainty on the long-term strategy for the automotive sector, is destroying investor confidence, driving much needed private capital overseas and limiting necessary progress on the decarbonisation of the transport sector.

“Without certainty from policymakers on targets or transparency on the approach to private partnerships, manufacturers and investors find themselves in limbo – questioning how or why to invest in this sector, and the long-term strategy for UK transport.

“This is confirmed by our own research into large transport businesses in the UK, where more than half have said they have moved or plan on moving investments out of the UK to a market that is more supportive of their sustainability goals.

A Government spokesperson said: “We are investing more than £2bn into our automative industry over the next five years, unlocking investment opportunities in the sector – such as EV production.

“Our ZEV mandate is also safeguarding skilled British jobs in the car industry while providing the certainty required for the private sector to invest £6bn into improving our chargepoint network.”

The ZEV mandate was introduced in January 2024 and sets out the trajectory for minimum targets for the proportion of new zero emission cars and vans sold in GB.

It starts at 22 per cent for cars and 10 per cent for vans in 2024, rising steadily to reach 80 per cent of cars and 70 per cent of vans by 2030, on a pathway to 100 per cent by 2035.

Over the last year the Government has secured a £4 billion investment from Tata in a new gigafactory.

Alongside greater transparency on general rules of engagement around private partnerships, UKSIF has said it is also calling on the Government to produce an investment prospectus for identified sites, which sets out the key opportunities, and the level of support investors can expect the Government to provide.

The group said this support could come in the shape of subsidies, and providing longer-term certainty for investors that they can access energy at a comparable cost to other international markets.

According to Government figures, the number of new electric vehicles and plug-ins sold overall is higher than last year, with a total of over one million electric cars now in use.