Almost a decade after playing home to Europe’s first mass-produced electric car [the Nissan Leaf], the UK is at risk of becoming a footnote in the global auto industry’s shift to battery-powered vehicles, Bloomberg News reported on Friday.

The country lacks the cell and pack factories automakers will need to support their transition away from the internal combustion engine so, in what could be a fresh blow to British carmaking, Tata Motors owned Jaguar Land Rover is in talks with Northvolt and SVolt Energy Technology about supplying batteries for a range of EVs it may assemble in Slovakia, Bloomberg sources said.

Unless battery investment picks up, carmakers may only accelerate their exodus from what was once the world’s second-biggest auto manufacturing base. The last few years, the UK fell outside the top 15, the report added.

“It’s about to be too late to preserve the UK role as a major automotive producer,” Andy Palmer, the former CEO of Aston Martin who also helped spearhead Nissan’s creation of the Leaf EV built in Sunderland, England, told Bloomberg. “Unless there’s either a carrot or a stick to incentivise battery production in the UK, it’s only a matter of time before the automobile industry here becomes a niche industry that caters to brands such as Rolls-Royce and Bentley.”

Bloomberg said the UK was endangered by scarce supply of raw materials, expensive energy, meagre government incentives and potential Brexit-related tariffs. While the country has pumped hundreds of millions of pounds into battery technology research, this has spurred minimal production.

So far, the report said, the UK has just one major plant in operation, owned by China’s Envision Group. The manufacturer added production of longer range packs for Leaf EVs last year and announced plans to expand, though not until 2024 at the earliest.

A spokesperson for Jaguar Land Rover, which produced more than 220,000 vehicles in the UK last year, told Bloomberg the manufacturer continued to explore all options for EV battery supply, and no decisions had been made. Representatives for Northvolt and SVolt declined to comment to Bloomberg.

In a separate statement sent to Just Auto, JLR said: “With our strategy for every single Jaguar Land Rover model available as a full BEV by the end of the decade, we will retain our plant and assembly facilities in the home UK market and around the world, as cited in the Reimagine strategy. We continue to explore all options around the supply of batteries. No decisions have been made yet.”

The Bloomberg report said Britishvolt was among a handful of startups which had announced plans to build giant battery plants in the UK, but firm orders and manufacturer commitments were lacking.

While Nissan Motor, Stellantis and Volkswagen’s Bentley have committed to making EVs in the UK, analysts have warned much more investment is needed to protect the industry’s position, Bloomberg said. To preserve the current size of the car sector, the UK needs to increase battery capacity 45-fold to more than 90 gigawatt hours, the Green Finance Institute’s Coalition for the Decarbonisation of Road Transport said in a report this month.

“If a battery sector does not emerge in the UK, there is both the lost opportunity cost of the financial gains of batteries being captured elsewhere, and in turn a risk that the existing automotive industry in the UK could diminish through moving to co-locate with battery production,” the government-backed group said.

Bloomberg said Britishvolt had broken ground on the UK’s first giant battery factory in northern England, with aims to produce 30 gigawatt-hours from the end of 2027 — enough cells for around 300,000 EV battery packs a year. It’s secured preliminary deals with Aston Martin, which has slated its first fully electric model for 2025, as well as Lotus.

A public-private venture between the owners of Coventry’s airport and its city council in central England, called West Midlands Gigafactory, aims to open in 2025 and eventually supply 60 gigawatt-hours per year at full capacity. But it’s unclear whether it will succeed without the support of a major carmaker, Bloomberg said.

The report warned the window to attract battery makers was narrowing with European governments lining up big support packages that have made them more attractive for investment. EU countries have collectively pledged more than EUR6 billion (US$6.3 billion) in public spending to build up the industry, an investment they say will unlock another EUR14 billion in private funds.

This month, VW said it was pushing ahead with plans for a EUR10 billion EV battery and vehicle production hub at its Seat plants in Martorell and Pamplona, Spain. That followed an announcement from the alliance led by Stellantis and Mercedes-Benz Group they’ll add a third battery manufacturing site, in Italy, on top of ones already planned for Germany and France.

Bloomberg noted the trade deal set up between the UK and the European Union in the wake of Brexit further complicated matters. While initially a relief to carmakers because the industry avoided a no-deal disaster, the pact clouds the path forward. By 2027, half of the parts content going into EVs and hybrids will need to be sourced locally — either from the EU or UK — to qualify for tariff-free trade.

“It’s not, unfortunately, a level playing field,” Mike Hawes, chief executive officer of the Society of Motor Manufacturers and Traders, told Bloomberg. “Governments intervene in Europe. They intervene in America. They intervene in in Asia. So the UK government has got to make sure that, at the very least, it creates the framework for UK manufacturing to be competitive.”