Government outlines more than £2bn investment in UK car industry

The UK government has outlined more than £2 billion of investment for the automotive industry, which forms part of a new Advanced Manufacturing Plan. The investment was first outlined by chancellor Jeremy Hunt in his Autumn Statement recently, and details have now been given with the publication of the full plan. It includes around £4.5bn of total investment in the “UK’s world-leading manufacturing industries”, including automotive, aerospace, clean energy and life sciences. The government claims that every £1 it invests in the future of manufacturing will build on £5 of additional private sector investment. The £4.5bn total will be invested between 2025 and 2030. The £2bn assigned to automotive builds on a number of existing schemes, and includes grants for both R&D and for scaling-up businesses through a new programme called Auto2030, with up to £50 million to develop the UK’s battery industry. Prime minister Rishi Sunak said: “We are going full throttle to back British businesses and make the UK a world leader in manufacturing - which already makes up over 43 percent of all our exports and employs 2.6 million people across the country. “ In the plan the government says the UK automotive sector is the second largest in Europe in “value added terms”, and accounted for £15.2bn of UK manufacturing Gross Value Added (GVA) and £38.3bn of exports in 2022. The plan highlights the need to transition rapidly to produce more EVs, and also cuites recent successes including the decision of JLR (formerly Jaguar Land Rover parent) Tata Group to build a 40GWh battery factory in Somerset, Nissan’s investment to build two new EVs in Sunderland and BMW Group’s £600m investment to produce the new electric Mini in Oxfordshire. The government launched an Automotive Transformation Fund (ATF) in 2020, and the £2bn investment is expected to build on that. The R&D grants will be available for designing and developing zero-emission vehicle prototypes and developing new systems of supply chain inputs. The scale-up grants will be offered to near-commercial pilots for zero-emission vehicle technology, while capital grants will be offered to “unlock strategic investments” in EV and battery supply chain firms, in order to attract future investment in the UK car industry. The government has also extended its CAM2030 programme to develop the UK’s connectec and automated mobility industry, with up to £150m of funding to support the deployment of self-driving services. The plan has broadly been well received by the UK car industry. Mike Hawes, the head of the Society of Motor Manufacturers and Traders, said that the plan was “essential if the UK is to compete in the face of fierce global competition”. He added: “These initiatives can only help to attract the investment necessary to seize the growth opportunities a Net Zero economy offers.” Richard Kenworthy, the boss of Toyota Motor Manufacturing UK, said: “Our industry is undergoing a significant transition as we make the changes and investments required to secure a zero-carbon future. It is important for manufacturers to continue to work together with the Government to deliver on this goal and ensure the global competitiveness of the UK automotive industry. “This new Plan will help prepare British businesses and the Government to maximise the opportunities this period of change will bring”. Nissan’s European chairperson, Guillaume Cartier, added that the plan “addresses a number of important topics that will support our wider electrification strategy as we move to 100 per cent electric vehicles.” In a statement, Jaguar Land Rover said that is “welcomes this package of investment and policy announcements for the Advanced Manufacturing sector.” It added the plan was “an important first step and we look forward to working with the Government to create the right environment to ensure an innovative and internationally competitive sector."