Chancellor Jeremy Hunt is set to announce hundreds of millions of pounds in additional funding for companies seeking to manufacture batteries for electric vehicles. The move is aimed at attracting major players, including Tesla and Chinese firms, to invest in the UK.
The existing Automotive Transformation Fund has already helped secure investments from Nissan and Tata. However, industry sources indicate that a significant portion of the £1.2 billion fund has already been committed.
The announcement is part of a wider package expected in the Autumn Statement, which will focus on stimulating growth in advanced manufacturing. With inflation having fallen to less than half its peak of 10.7% last year, the government is turning its attention to economic expansion.
Alongside the EV grants, the government is widely expected to extend—or possibly make permanent—the 'full expensing' tax break, allowing firms to offset 100% of spending on new machinery against profits. This policy, due to expire at the end of the 2025 tax year, currently costs around £10 billion annually according to the Office for Budget Responsibility (OBR).
The Treasury is in discussions with the OBR to argue that the long-term benefits to the economy and productivity outweigh the upfront cost. The Autumn Statement will allow Mr Hunt to claim that the more businesses invest, the less tax they will pay, despite having raised corporation tax from 19% to 25% last year.
