Industrial Strategy and the Automotive Sector Deal – just more talk or a worthwhile exercise?

On 10 January the Government launched the Automotive Sector Deal, providing support for the sector in the implementation of the Industrial Strategy.

On 10 January the Government launched the Automotive Sector Deal, providing support for the sector in the implementation of the Industrial Strategy.

What is clear from both the Industrial Strategy and the Automotive Sector Deal is that the UK Automotive industry is seen as a beacon of hope and opportunity, particularly in the brave new world post EU.  Automotive is at the cutting edge of global challenges and significant developments in how we live, work and play and also forms a large percentage of our exports.  Many sectors and players have a role to play in ensuring its continuing ability to adapt and play on the world stage.  Each of the 5 foundations of the Industrial Strategy play into the development of the Automotive Sector, hence the partnership between Government and Industry to push the sector forward.

So what does the Automotive Sector Deal do?  Arguably, it simply reiterates at this stage the commitments highlighted and identified in the Industrial Strategy, re-packages funding and initiatives which are already in place (or which remain to be approved), remains light on the specifics and many of the projects highlighted are fairly short term in commitment i.e. less than 5 years.  We do get clarity on the key initial commitments of both government and industry to the implementation of specific challenges and initiatives and it is evident that this is intended to be a longer term play, not a short term PR stunt.  Here’s hoping…..

What leaps out of the document is the concept of joint ownership and oversight of the deal and a sense that organisations are “putting their money where their mouth is” and getting behind the initiatives. 

Key highlights of the Automotive Sector Deal include:

  • R&D: Government and Industry matched funding commitment for R&D work at the Advanced Propulsion Centre until 2023, along with further R&D funding commitments from 2023 to 2026;
  • Ultra low/zero emissions: £246m from Government for the Faraday Battery Challenge, as well as £78m for the Faraday Institute supporting academic research; £80m for the Faraday National Battery Manufacturing Development Facility and £88m for the Faraday Battery Challenge Innovate UK programme.  This is supported by Industry through £80m funding over the working lifetime of the National Battery Development Facility and £59m matched funding for the Faraday Battery Challenge Innovate UK programme;
  • CAVs:  £250m from Government to support the UK as a global leader in the development and deployment of CAVs, with a further £156m from Industry split across various projects;
  • Supply Chain:  £16m of Government funding (subject to a business case) for an industry led national supplier competitiveness and productivity improvement programme, to be supported by funding in kind from participating supply chain companies; and 
  • Infrastructure:  Government funding of £23m for a hydrogen transport programme; £20m to support vehicle to grid projects to create a smarter energy system; £200m (match funded by private investors) to support an electric car charging infrastructure and £40m R&D funding from the National Productivity Investment Fund (matched by Industry) to support new charging technologies on street and wireless charging projects.

Back to the title – in the author’s view this Sector Deal is worth the paper it is written on for the following reasons:

  • It supports and starts to document a cohesive plan for the development of the sector:  To take forward any strategy, we need a clear, apolitical direction of travel to provide a known framework within which decisions on longer term investments can be made
  • It provides the momentum for investment:  No doubt the funding detailed in the report is just part of what is needed to deliver on the sector goals but we have to start somewhere.  As with anything, if you can get things going and start delivering results then people buy in to the propositions.  By way of example, what puts many off purchasing an electric vehicle is the charging issues – so we see a push on implementing a charging infrastructure and research into improving battery life and efficiencies; and
  • We need to look forward:  The Sector Deal only makes passing reference to Brexit (a minor miracle in these times) and the Industry’s desire for frictionless trade with the EU post Brexit.  We all know the challenges the Industry and the country faces but the Sector Deal is very much about the positives and highlighting that we remain an exciting place in automotive terms to live and work, with a great deal to contribute.

It is always a risk that we become cynical and jaded by government and industry strategies and proposals or that they got lost in the wider political noise – there is no denying that we have seen similar projects and proposals before and greater detail is still required as to how this will play out in practice.  But here’s hoping this one helps drive us into a bright and exciting future….

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