‘Gigafactories’ and scrappage schemes proposed by Miliband as part of an electric vehicle revolution

By Will McMyn

Ed Miliband, Shadow Business, Energy and Industrial Strategy Secretary, gave a speech last week, largely on electric vehicles and what a Labour government would do to stimulate their uptake. The specifics of the speech rested on the more general underlying point that, according to Miliband, the Conservatives don’t recognise “the central role of government” in addressing climate change and capturing the benefits of a flourishing green economy.

Miliband cited the Government’s move away from its industrial strategy and the recent disbanding of the Industrial Strategy Council as evidence that, in his view, the Conservatives are slipping back to their traditional orthodoxy that market economics will solve all challenges. Ed, unsurprisingly, rejected that view of the world, saying that only government intervention can deliver the speed and scale of action necessary to achieve net zero and to enable the benefits of a green economy to be shared fairly.

Miliband set out some new policies, explaining that a Labour government would invest in three additional gigafactories, beyond the one that the Conservative government is already supporting. If the term “gigafactory” leaves you scratching your head, it just means a really big factory, particularly one which produces batteries for electric vehicles. The term was coined by Elon Musk and Tesla, and UK politicians of all hues – eager to associate themselves with Tesla’s success – have adopted it as they paint visions of the UK as a potential global leader in electric vehicles and other green technology. Incidentally, Elon Musk opted to put his first European gigafactory in Germany, ruling out the UK at the time because of “Brexit uncertainty”, though apparently, he has since visited and is now considering a site in Somerset.

Miliband explained that, over the lifetime of a vehicle, an electric car is now more or less as cheap as a petrol or diesel one, but still has higher upfront costs which makes them unaffordable for lower income households. He cited an interesting stat: apparently you are four times more likely to drive an electric car if you live in the southeast than if you live in the northeast. To prevent “baking in” inequality to the transition to cleaner vehicles, Miliband proposed an interest free loan for purchasers of both new and second-hand electric cars to help households with lower incomes overcome the upfront cost. The idea is the loan can then be paid back from the savings made through lower running costs.

He also set out Labour’s plan for a scrappage scheme to encourage car owners to swap their existing petrol and diesel cars for electric ones, as well as ambitions for a much faster roll out of electric vehicle charging infrastructure across the country.

All told, Miliband said that Labour’s plans would amount to an “electric vehicle revolution” to boost the UK car industry and create jobs. His lofty rhetoric was somewhat undermined, however, by his admission on television on the morning of his speech that he doesn’t himself own an electric car. He didn’t much help matters with the comically weak assertion “I’ve definitely been in an electric car”.

Labour’s ambitions for electric cars are welcome and, hopefully, corresponding Labour policy will soon emerge for other modes of road transport – vans, buses and HGVs. It will be interesting to compare Labour’s announcements with the contents of the Government’s own Transport Decarbonisation Plan which is due to be published shortly. Watch this space.