Re-filling the tank for automotive funding

The recent announcements of additional Government funding for low carbon vehicle innovation highlight the strategic importance assigned to low carbon vehicle investment in the UK. The relevance of the motor industry to the UK economy is widely recognised with over one million vehicles and two million engines produced in the UK annually; and with the motor industry employing over 700,000 people[1]and delivering around £12 billion in net value added to the economy[2]each year.

Regulation of CO2 emissions, combined with the powerful political drivers of climate change, energy security and energy efficiency,mean that there is an inbuilt impetus for both supply chain development and market growth for low carbon vehicles. The partnership working between the UK Government and Industry, exemplified by the work of the Automotive Council, reflects the importance assigned by both parties to ensure the UK is well placed to benefit from this growth through technological excellence, a good skills base and a conductive business environment.

The regulatory pressure on carbon reduction means the global motor industry is hungry for new technology. The Technology Road Mapping work of the Automotive Council points toward the future reduction in CO2 emissions being delivered through cumulative emissions reductions achieved by changes that willimpact almost every single component in the car, notably through light-weighting but also through increased electrification of the powertrain for improved energy efficiency, as well as enhanced energy recovery and onboard energy storage. Key technologies for carbon emissions reduction include advanced batteries, electric motors, power electronics, fuel cells, advanced steels, composites and aluminium for weight reduction, as well as thermal energy recovery systems and internal combustion engine technologies.

In terms of establishing a conductive business environment for low carbon vehicle investments the UK Government, through its Office for Low Emission Vehicles (OLEV), it has taken a proactive response to plug-in vehicles as the first generation of ultra low carbon vehicles to reach the market. Since the Plug-in Car and Van grant was set-up in 2011, over 4,500 motorists have benefitted from this funding and with the cost ofelectric vehicles already reducing and the choice of vehicles increasing, either purchasing or leasing an ultra-low carbon vehicle is becoming more realistic for both private motorists and fleet operators.
It is no secret that the uptake of Electric Vehicles has been slower than some expected with real and perceived barriers cited including high initial capital cost and consumer concern over range anxiety and limited public infrastructure. Government and industry players are committed to sustained effort to support what is expected to be a gradual uptake of plug-in vehicles in the market, running in parallel with the increased use of plug-in capability, as a means of offering consumers fuel cost savings and improved environmental performance. Much of this commitment is based on a confidence within the industry that battery prices can and will fall as a result of technology improvements, volume production and cost-down initiatives, as reported by Industry analysts including McKinsey & Co[3].

Likewise, vehicle recharging infrastructure is continually growing. The UK national Plugged-in Places Scheme has already helped install over 5,000 public charge points in key areas including business parks, tourist attractions and leisure centres with the scheme being extended as well as being complemented by new national measures. These include support for rapid charger corridors to aid motorists making longer journeys. According to recent research by AMA Research,by 2025, the UK market for charging infrastructure is expected to be worth over 30 million, from a value of 8.3 million in 2013[4]. Other European countries are seeing similar growth rates projected for electric vehicle infrastructure.

Existing investment into low carbon vehicle infrastructure is proving successful and generating very substantial returns. As tough CO2 emission markets continue to drive the development and improvement of these technologies this is set to continue. Let's make sure continued funding is available to keep the tank fill and drive the industry forward.

[1] SMMT, Motor Industry Facts 2013, p. 12.

[2]SMMT, Motor Industry Facts 2013, p 8.

[4]AMA. Electric Vehicle Charging Infrastructure Market Report – UK 2013-2025 Analysis, via

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