Where will the UK government put its funding?

By Gary S. Vasilash

McLaren Automotive produces amazing rolling sculptures that (1) go exceedingly fast and (2) cost a non-trivial amount of money.

Supercars.

Like all OEMs, McLaren is pursuing electrification.

Its CEO, Michael Leiters, thinks that the UK, where McLaren is based, needs to do more to facilitate the creation of a supply chain that would be more EV-intensive:

“Today, our hybrid McLaren Artura powertrain has 64% UK content. If this car was a pure EV, the UK content of the powertrain would reduce to 13% because we cannot currently source the relevant componentry in the UK,” Leiters says.

He argues that because the UK has specialization in vehicles that are at the top end—“Today it remains home to some of the world’s most admired performance car brands, as well as the majority of Formula 1 racing teams”—it would be beneficial were the UK government—which, incidentally, will get a new leader on July 4—to develop a plan for electrification:

“A clear industrial strategy, led by investment in the domestic supply-chain, will deliver growth, support jobs, help decarbonise the economy and secure a vibrant future for the UK performance car industry.”

Metaphorically waving the Union Jack:

“We must harness the skills, knowledge and ingenuity of the UK motorsport and performance car industry to create a global, high-performance centre of excellence.”

Leiters points out:

“UK-based luxury and sports car brands command tremendous pricing power thanks to their rich histories, intrinsic brand value and class-leading performance attributes.

“As a result, the productivity gross value added of McLaren employees is 51% higher than that of the UK automotive manufacturing sector as a whole.”

But here’s the thing:

McLaren sold just over 2,000 vehicles in 2023.

Highly productive McLaren workers notwithstanding, it probably isn’t making the Chancellor of the Exchequer overly exercised.

Leiters also pointed out:

“The UK was once the world’s largest vehicle exporter.”

While that’s not going to happen again, the question that should be asked by the next UK government is whether it should be investing to benefit the supercar manufacturers in the country or create a supply chain so that companies like Stellantis, which threatened earlier this week that it may stop producing vehicles in the UK (among its brands are Vauxhall, which was founded in London in 1857) due to EV rules, would consider it better to build in Britain than not.