Institute of Welsh Affairs, ClickOnWales, 2 April 2016.
http://www.clickonwales.org/2016/04/wales-new-car-industry/

Gavin Harper says the Welsh automotive industry could do things differently and utilise steel.

In recent months, Wales’ has trumpeted the arrival of new car makers, jobs and industry. The queues for new jobs at a recruitment event for Aston Martin stretch out the door. A spirit of optimism prevailed in the first quarter of 2016 and business in Wales appeared to be on the front foot. Yet before the ink has dried on the newsprint of this great news, Tata’s shock announcement has sent seismic waves through Welsh Industry.

The scale of job losses across Tata’s sites has the potential to devastate families, communities and cause untold misery. But in this highly emotive debate about the future of Tata and with the rush to defend jobs at Tata it is important that we do not lose sight of the opportunities present in the greening of Welsh Industry.

Professor Garel Rhys writes in the Western Mail, 31/03/2016, that Wales’ burgeoning automotive sector could be threatened by the closure of Port Talbot’s steel industry. He goes on to say that the Government’s interest in green policies has sacrificed the UK Steel industry.

I do not believe this to be the case. The firms which the Welsh Government has attracted to Wales offer a potential template for the automotive industry to do things differently. Through lightweight technologies which do not use steel we have the potential to make greener, more efficient vehicles. Alongside developing these new processes and technologies, we also need to seize the opportunities offered by green applications of steel and make cleaner processes our competitive advantage not view them as a burden.

Aston Martin has announced its production of new models at St. Athan (based on an aluminium bonded bodywork structure), TVR have announced production of their new vehicle using Gordon Murray’s ‘iStream’ process in Ebbw Vale. Whilst early versions of this process used thin-walled steel, more recently Gordon Murray Design has announced “iStream Carbon” a process based on lightweight carbon fibre tubes for structure. The panels which clad the iStream structure are lightweight composites, not steel pressings. Also, we should not neglect Riversimple, a car maker with a radical new business model for automobility based in Llandrindod Wells. Their unique, small ‘Rasa; vehicle is also based on carbon fibre bodywork. In a very short period of time, the Welsh Government has managed to attract a number of diverse specialist vehicle manufacturers to Wales.

What do all three of these companies in Wales’ nascent new “motor industry” have in common? None of them are reliant on pressed steel bodywork.

For some time, Prof. Peter Wells & Dr. Paul Nieuwenhuis at Cardiff University’s Centre for Automotive Industry Research have argued that the present automotive industry’s “business model” is based on “pressed steel” bodywork, but that this could be a barrier to future, lightweight, efficient, environmentally sound vehicles. Lightweight vehicles have the potential to be more efficient, cleaner and greener.

Whilst the loss of UK steel could affect volume car makers reliant on pressed steel in other parts of the UK, Wales’ embryonic new car industry does not appear to be reliant on this raw material. Similarly, other high-value added, premium marques such as Jaguar Land Rover, Bentley and Rolls Royce have all been looking to aluminium for lighter weight, more efficient vehicles. Around the world, large car makers like BMW are looking at scaling up carbon fibre production. Wales must look at these emerging industries and see the opportunities for industrial development and our National Innovation System as well as reflecting on our existing capabilities and proud industrial past.

Steel has not yet had its day and has the potential to play a role in a clean, green future economy – only yesterday Tesla announced the launch of their US made “Model 3″ electric car to great fanfare. A clean electric car based on steel bodywork – which is cheap to produce.

In other domains of application, Swansea University’s ‘SPECIFIC’ project has looked at how to use coated steel to transform “buildings into power stations”, applying thin film solar cell coatings to strip steel to enable it to generate electricity.

The car industry is wedded to steel for the time being; but steel vehicle production requires volume and scale. The new entrants which comprise Wales brand-new car industry are using bodywork technologies which are economic at lower scales of production when used to produce vehicles that sell into premium segments, or where novel business models can amortise the total cost of ownership. Here are great opportunities for Wales to develop knowledge, capabilities and innovative technologies that in time could shape and revolutionise the mainstream industry.

The economic case for steel-making in Wales will doubtless be thrashed out in the weeks and months to come. Many are critical of “green levies” that are blamed for making EU steel uncompetitive – yet in clean industrial transformation, Wales must see the opportunities not the barriers.

If it is to compete, Welsh steel needs a level playing field; both economically and also environmentally. It is important for our policymakers to factor in the carbon penalty associated with long steel supply chains from China, and also the carbon intensity of dirty production abroad.

Whilst tariffs or carbon taxes could allow us to make a fairer assessment of the competitiveness of UK steel; we must not shut our eyes to the potential for innovation, new technologies and new business models.  If we do not pursue green policies, we will sacrifice far more than the UK steel industry. Maps showing the sea level rise from anthropogenic climate change show the impact on many coastal villages – climate change is real and it will affect Welsh communities.

Wales’ has the long-term foresight to look to firms exploiting new and innovative technologies – and in time that diversity may prove to be the key to the resilience of the new Welsh motor industry. BMW’s Moses Lake Carbon Fibre plant or Tesla’s Gigafactory all point the way to the clean industries of the future and Wales’ should ensure it looks to its future options as well as its proud heritage.