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Industrial Strategy Automotive Sector Deal
Industrial Strategy Automotive Sector Deal
Foreword
For decades, the UK’s As ever, partnership will be pivotal. This For over a century, the UK has
automotive industry has first Automotive Sector Deal builds on written the history of the automotive
the longstanding partnership between industry. As we open the sector’s
powered our economy
the government and industry, brought to next chapter, let’s work together
forward. Today, automotive life through the Automotive Council and to make sure the technologies of
firms from around the world will be followed by further commitments. tomorrow are developed, tested and
choose to set up shop here, manufactured right here in the UK.
As a result of the Sector Deal, both
citing our history of excellence, government and industry will invest
skilled workforce and world- about a quarter of a billion pounds
leading supply chains. to develop and manufacture electric
As ever, partnership will be pivotal. In the vehicles. This includes the Faraday
next 10 years, the sector will see more Battery Challenge, which will drive the
change than in the previous hundred. technologies to power electric vehicles
From the engines that power our cars, in the future, as well as £80 million
to the way we control them and our for a new state-of-the-art automotive Rt Hon Greg Clark MP
attitudes to owning them, technology battery development facility in Secretary of State for Business,
is changing what the industry looks Coventry. This investment marks yet Energy and Industrial Strategy
like and where money can be made. another step forward on our journey
towards mass producing electric
New conditions require new thinking and, batteries and vehicles here in the UK.
as a country, we are extraordinarily well-
placed to provide this. Our rich history The deal also aims to create a
of scientific discovery includes the world-leading testing environment
lithium-ion battery, which was invented for Connected and Autonomous
in this country and already powers Vehicles. Using our renowned test
millions of vehicles around the world. tracks, we will improve the safety of
these vehicles by pushing them to the Nigel Stein
And in the future, the automotive limits of their speed and handling. Chief Executive GKN plc and
sector will shape our response to the Automotive Council Chairman
Grand Challenges articulated in our And, finally, the government is investing
Industrial Strategy, such as Clean in a new industry-led programme
Growth and the Future of Mobility — to raise the competitiveness of UK
transformations which will forever suppliers to match the best in Europe.
change how people live, work and travel.
2 3
Industrial Strategy at a glance
Industrial Strategy Automotive Sector Deal
We will create an economy that boosts productivity and earning Key policies include:
power throughout the UK
Ideas Business Environment
Industrial Strategy is built on 5 foundations ``
Raise total research and `` Launch and roll out Sector Deals –
development (R&D) investment to partnerships between government
2.4 per cent of GDP by 2027 and industry aiming to increase sector
``Increase the rate of R&D tax credit productivity. The first Sector Deals are
Ideas in life sciences, construction, artificial
the world’s most innovative economy to 12 per cent
intelligence and the automotive sector
`` Invest £725m in new Industrial
Strategy Challenge Fund programmes ``
Drive over £20bn of investment
to capture the value of innovation in innovative and high potential
People businesses, including through
People establishing a new £2.5bn Investment
good jobs and greater earning power for all
``
Establish a technical education Fund, incubated in the British
system that rivals the best in the Business Bank
5
world to stand alongside our world- ``Launch a review of the actions that
class higher education system could be most effective in improving
Infrastructure ``Invest an additional £406m in maths, the productivity and growth of small
foundations of a major upgrade to the UK’s infrastructure digital and technical education, and medium-sized businesses, including
productivity helping to address the shortage of how to address what has been called
science, technology, engineering the ‘long tail’ of lower productivity firms
and maths (STEM) skills
Places
Business environment `` Create a new National Retraining
`` Agree Local Industrial Strategies
the best place to start and grow a business Scheme that supports people to re-skill,
beginning with a £64m investment that build on local strengths and
deliver on economic opportunities
for digital and construction training
``
Create a new Transforming Cities
Infrastructure fund that will provide £1.7bn for
Places
``
Increase the National Productivity intra-city transport. This will fund
prosperous communities across the UK
Investment Fund to £31bn, supporting projects that drive productivity by
investments in transport, housing improving connections within
and digital infrastructure city regions
``Support electric vehicles through ``Provide £42m to pilot a Teacher
We will set Grand Challenges to put the United Kingdom £400m charging infrastructure Development Premium. This will test
at the forefront of the industries of the future: investment and an extra £100m the impact of a £1,000 budget for
for the plug-in car grant high-quality professional development
AI & Data Economy Clean Growth `` Boost our digital infrastructure with for teachers working in areas that
We will put the UK at the We will maximise the advantages over £1bn of public investment, have fallen behind
forefront of the artificial for UK industry from the including £176m for 5G and £200m
intelligence and data revolution global shift to clean growth for local areas to encourage roll out
of full-fibre networks
Future of Mobility Ageing Society
We will become a world We will harness the power of An independent Industrial Strategy Council will assess our progress
leader in the way people, innovation to help meet the and make recommendations to government.
goods and services move needs of an ageing society
4
Industrial Strategy Automotive Sector Deal
Executive Summary
The Automotive Sector Deal, the first in a rolling series of
intended deals with the sector, builds on the partnership
between the government and industry that has been in place
since the Automotive Council was established in 2009, setting
the direction and long-term strategic priorities for the sector.
This partnership has yielded results: built, powered and driven means the
vehicle and engine output has industry must continue to adapt to
increased, productivity has improved maintain its position as a global leader.
and the proportion of UK components It must take decisions now to ensure
in each vehicle produced in the it remains both attractive to invest
United Kingdom is rising (44 per in and central to the UK economy.
cent in 2016, up from 36 per cent The UK automotive industry with its
in 20111). For the seventh successive diverse range of products, spanning
year expenditure in research and volume, premium and niche vehicles,
development (R&D) by motor vehicle has benefited from the European
manufacturers has increased, and in market, with highly integrated supply
2016 it reached £3.4bn, growing by chains and a significant demand and greater earning power for all; in R&D from £9.5bn to £12.5bn, as well
20 per cent on the previous year2. for UK-built cars across the region. for a major upgrade to the UK’s as a commitment to work with industry
These achievements matter not just In total, half of all UK automotive infrastructure; to be the best place to boost spending on R&D to 2.4 per
to the industry but to the country. It is exports go to the European Union. to start and grow a business; and for cent of GDP by 2027. This will increase
through these successes that the sector As the UK leaves the EU, the industry prosperous communities across the UK. to 3 per cent over the longer term.
is able to provide over 390,000 high- welcomes the government’s ambition
We have prioritised an initial set This Sector Deal demonstrates
quality, well-paid jobs, both directly in to achieve a new relationship that
of proposals, which have been how the automotive sector can
vehicle manufacturing and through the is free from tariffs and without
agreed between the Automotive play an important part in meeting
supply chain3, increasing prosperity friction to trade – factors that are
Council and the government. It this commitment by investing
across the country. The industry is an fundamental to the competitiveness
is intended that this deal is the in the development of the next
international success story, generating of the UK automotive sector.
first of several with the sector. generation of vehicles.
over £40bn of export revenue in 20164, The proposals contained within
and helping the UK to maintain a Ideas In recognition of this, the Automotive
this Sector Deal are designed to
reputation for engineering innovation Council asked Richard Parry-Jones,
complement this ambition and are The ambitions set out in the Industrial
and manufacturing excellence. former Chief Technical Officer and
aligned to the foundations set out in Strategy White Paper are underpinned
Head of Global R&D Operations at
Production levels achieved a 17-year the Industrial Strategy – ideas, people, by a commitment to world-class
Ford Motor Company, to conduct a
high in 2016 with 1.7 million vehicles infrastructure, business environment innovation. It set out a further increase
sector-led review into accelerating
rolling off production lines5. Today the and places. They support its vision in R&D investment of £2.3bn in
the transition to the manufacture of
sector faces a new set of challenges. for the UK to be the world’s most 2021/22, raising total public investment
ultra-low and zero emission vehicles.
Significant changes in how cars are innovative economy; for good jobs
6 7
Industrial Strategy Automotive Sector Deal
a new £2.5bn investment fund Infrastructure
incubated in the British Business Bank As we set out in the Industrial Strategy
to drive investment in innovative White Paper, having modern and
and high potential businesses. A new accessible infrastructure throughout
UK-backed and industry-led brand the country is essential to our
for CAV – Meridian – was set up to future growth and prosperity.
convene UK industry around shared
priorities, and showcase our approach We have announced an increase in
internationally. Meridian will cement the National Productivity Investment
the UK’s status as the go-to destination Fund to £31bn, supporting investments
for the development and testing of in transport, housing and digital
CAV and new vehicle technologies. infrastructure. We are investing over
£1bn in boosting digital infrastructure,
Manufacturing is crucial to the including £176m for 5G and £200m
economy, providing 10 per cent of for local areas to encourage roll
the UK’s Gross Value Added (GVA), out of full-fibre networks.
generating around 50 per cent of
our exports and accounting for Our investments in infrastructure
70 per cent of business-led R&D8. are among the government’s most
Advanced manufacturing supply significant interventions in the economy
The evidence gathered from the review our competitive advantage of chains are highly complex and globally and we are ensuring that they actively
underpinned the rationale for the being able to test anywhere in the integrated, with components often support our long-term productivity and
landmark Faraday Battery Challenge6. UK today. It is estimated that the crossing borders several times. drive the growth of emerging industries.
Through the Faraday Battery CAV sector will be worth £28bn Although we have a strong position, To accelerate the transition to electric
Challenge, the government is to the UK economy by 20357. there is a major opportunity to vehicles we are creating a new £400m
investing £246m over four years deepen the supply chain presence for Charging Infrastructure Investment
Business Environment Fund (£200m from the government
into a programme of competitions the sector in the UK. We therefore
The Industrial Strategy White Paper to be matched by private investors);
focused on the research, innovation intend to launch a new supply chain
sets out the government’s ambition to and providing £200m Office for Low
and scaling up of battery technology. competitiveness and productivity
make the UK the best place to start and Emission Vehicles R&D funding over
improvement programme targeting
In the coming months the government grow a business. A key part of this is the current spending review period;
areas where key businesses need to
will publish a strategy for the transition our globally competitive corporate £100m new funding for the plug-in car
improve to match the best in Europe.
to zero emission road transport, tax rate of 19 per cent, our continuous grant; £40m R&D funding (matched by
The programme will provide bespoke
ensuring the UK continues to be a focus on regulatory reform and industry) for new charging technologies
training and streamlined business
world leader in the development, our ability to attract global talent including on-street and wireless projects;
processes to help build the integrated
manufacture and use of these vehicles. and disruptive start-ups. Our initiating a £20m vehicle-to-grid
supply chain we need in the UK to
The UK is also pursuing a position in the challenge is to improve how we R&D competition, a £23m Hydrogen
manufacture the future generation of
global vanguard of the development, spread the best practice of our Transport programme and making
vehicles at volume. This will support the
demonstration and deployment of most productive businesses. a commitment that the government
industry’s ambition to increase the level
connected and autonomous vehicle Our key policies include launching of UK content by value in domestically- will lead the way, making 25 per cent
(CAV) technologies, capitalising Sector Deals – and automotive is an built vehicles to 50 per cent by 2022. of all cars in the central government
on our commitment to R&D and early partner. We are also establishing fleet ultra-low emission by 2022.
8 9
Industrial Strategy Automotive Sector Deal
Places People
Automotive
The Industrial Strategy set out our goal The government set out its vision to
of helping prosperous communities to create good jobs and greater earning
thrive across the UK. We are creating a power for all in the Industrial Strategy.
Sector Deal
new Transforming Cities fund that will To do this, we need to ensure that we
provide £1.7bn for intra-city transport. are equipping citizens for jobs shaped
This will fund projects that drive by next generation-technology.
productivity by improving connections The growth of the UK automotive
Key commitments
within city regions. We are also sector and the transition to the next
committing to agree Local Industrial generation of vehicles will require
Strategies that build on local strengths people with new skills and a substantial
and deliver on economic opportunities. upskilling of the existing workforce.
The 2017 CAV testbed competition This requires a coordinated national
aimed to create the world’s most and local approach through established
effective CAV testing ecosystem by institutions such as the Institute for
creating a number of distinct test Apprenticeships and supporting
capabilities which would work together the development of the new T level
as part of an open testing environment. qualifications. The government and
Collaborative projects supported under industry are committed to taking
this initiative form part of a unique forward this agenda through the
cluster running from our automotive next phase of Sector Deals.
heartlands in the West Midlands, Under the direction of the Automotive
through our innovation centres near Council, and with initial grant support
Oxford and Milton Keynes, to London. from the government, the industry has
The portfolio of projects linked to established the Automotive Industrial
the Advanced Propulsion Centre Partnership for Skills (AIP). The AIP
(APC), a ten-year, £1bn initiative, has developed a skills roadmap for the
funded 50:50 by government and sector, which is guiding steps to tackle
industry to support the development critical skills shortages as the sector
of low carbon technologies, include grows and evolves. A key element is to
participants spread across the UK, boost apprenticeships. The automotive
and is supported by a network of sector has been at the forefront of
Centres of Research Excellence. apprenticeship reforms, leading the
These centres, the ’APC spokes’, development and piloting of the new
are linking industrial and academic ‘trailblazer’ standards, and setting up
communities from Newcastle to the Apprenticeship Matching Service.
Brighton and from Nottingham to Bath.
10 11
Industrial Strategy Automotive Sector Deal
Government action to support the automotive sector Industry action to support the automotive sector
Ideas Ideas
Advanced Propulsion Centre to support fundamental Advanced Propulsion Centre Battery Manufacturing
``
£500m over 10 years to 2023 to academic research); ``
£500m match funding for Development Facility; and
research, develop and industrialise - £80m for the Faraday National collaborative R&D projects; and ``
£59m match funding for the
new low-carbon automotive Battery Manufacturing ``Match funding to support Faraday Battery Challenge
technologies in the UK. Development Facility; and APC and its core activities. Innovate UK programme.
Automotive R&D - £88m for the Faraday Battery Automotive R&D Shaping the future of mobility
``
£225m from 2023 to 2026 to Challenge Innovate UK programme. ``
£56m funding for the
``
£225m match funding
support R&D in the sector9. Shaping the future of mobility for collaborative R&D CAV collaborative R&D
``£250m to position the UK from 2023 to 2026. projects to date; and
Transition to ultra-low and
zero emission vehicles as a global leader in the Transition to ultra-low and ``Match funding for the £100m
development and deployment zero emission vehicles CAV testing infrastructure.
``£246m for the Faraday Battery
Challenge to make the UK a of connected and autonomous
vehicles (CAVs). This includes: ``£80m funding over the
world leader in the design, working lifetime of the National
development and manufacture - £150m for collaborative
of batteries for the electrification R&D projects; and
of vehicles. This includes: - £100m for CAV testing
- £78m for the Faraday Institution infrastructure.
Business Environment
(100 per cent public funding
Supply chain competitiveness and productivity improvement
In order to support the industry’s chain companies participating in the
ambition to increase the value competitiveness and productivity
Business Environment of UK content in domestically improvement programme.
produced vehicles to 50 per ``
Vehicle manufacturers and Tier
Supply chain competitiveness and productivity improvement cent by 2022 , industry will: one suppliers will take a leading
``
£16m funding subject to business competitive UK supply chain for ``Implement a single scalable role in identifying key strategic
case for an industry-led national future volume vehicle production. productivity improvement suppliers and take part in the
supplier competitiveness and A robust monitoring and evaluation programme; and governance of programme.
productivity improvement framework will be set up to measure `` Match fund at least £16m
programme to support a the success of this programme. (contribution in kind) from supply
sustainable and internationally
12 13
Industrial Strategy Automotive Sector Deal
Government action to support the automotive sector
Business Environment
``
£100m new funding for the Plug- at work, to come into effect in
In Car Grant to help consumers April 2018. This will support
buy battery electric vehicles. the roll out of electric vehicle
``From April 2019, Government will chargepoints at workplaces.
exempt zero-emission capable ``
25% of cars in central Government
taxis from the VED supplement department fleets will be ultra-
that applies to expensive cars, low emission by 2022, and the
consulting in advance on Environment Agency will ensure
how to define such taxis. all its cars are ultra-low emission
`` Provide a Benefit in Kind exemption by 2025, and stop buying or
for employees offering free leasing diesel cars immediately.
charging for electric vehicles
Infrastructure
``
£23m hydrogen transport ``
A new £400m electric car
programme to increase the Charging Infrastructure
number of publicly accessible Investment Fund (£200m new
refuelling stations and increase Government investment to be
the uptake of fuel cell vehicles. matched by private investors).
``£20m to support vehicle-to- ``
£40m R&D funding from the
grid projects in order to create National Productivity Investment
a smarter energy system, while Fund (matched by industry),
increasing the numbers of to support new charging
electric cars on UK roads. technologies for on-street and
wireless charging projects.
14 15
Industrial Strategy Automotive Sector Deal
Ideas
Moving to ultra-low and investment is required to deliver the
zero emission vehicles necessary transformation of automotive
Advances in electrification must be manufacturing – including a UK ‘giga-
made by manufacturers to meet the factory’ capable of producing the
government commitment to ending quantity of battery cells needed to meet
sales of conventional petrol and diesel the future demand for batteries from
cars and vans by 2040. Currently vehicle-makers as well as establishing
only one per cent of total automotive the requisite supply chains of the
production comprises electric future. The UK faces tough competition
vehicles10 and continued international from Germany and China, which have
competitiveness of the manufacturing established themselves as leaders
base is dependent on the sector making in the development of batteries.
the transformation to new ultra-low Advanced Propulsion Centre
and zero emission technologies.
The Advanced Propulsion Centre (APC)
The UK produced 1.7 million cars is the coordination hub for managing
in 201611. Our engine sector is the transition to ultra-low and zero
even larger, producing 2.5 million emission vehicles. This is a £1bn
internal combustion engines for commitment between the government
vehicles in the same year12. UK and the automotive industry over 10
production of internal combustion years which aims to position the UK at
engines is worth £7bn per year, the the cutting edge of the development
majority of which are exported13. and commercialisation of next
The strategic transition from traditional generation low carbon technologies.
powertrains – the components and
Richard Parry-Jones’s
systems that generate the power
review into accelerating the
to move the vehicle, such as fuel
manufacture of ultra-low and
tanks, engines and transmissions – to
alternatives such as batteries, electric
zero emission vehicles
motors and the associated power The aims of the review were to:
electronics needed to control them, ``
establish the UK as a world
represents a significant opportunity leader in R&D in battery and
for the automotive sector. This brings electric traction technologies;
significant benefits, with the value of
``
support the complete spectrum
the electric powertrain two to three
of electric vehicles (EVs),
times higher than that of the internal
including hybrids, pure battery
combustion engine. However, significant
EVs and fuel cell EVs;
16 17
Industrial Strategy Automotive Sector Deal
Case study: the APC
The GKN Hybrid Power flywheel capability, additional collaboration
stores energy mechanically in for all partners, and the development
a high-speed carbon rotor. This of the next generation flywheel, with
innovation was first used in top- 120 kilowatt peak power output from
flight endurance racing, helping to a 1 kilowatt hour energy storage
power Audi’s R18 e-Tron Quattro to system that can be manufactured
a podium finish in four consecutive for mass market applications.
Le Mans 24-hour races. The latest design has the potential
The APC’s Gyrodrive project for cross-sector development,
sought to further develop and including with the UK Ministry of
test this technology for use Defence. Testing has been completed
in the hybrid bus market. on machinery in the agricultural
The technology was rolled out to an technology sector. The work has
operational fleet of 35 buses. This also supported the growth of
project has resulted in increased skills, iNetic, an innovative UK enterprise,
which collaborated in the project.
``
leverage R&D expertise to fundamental research to innovation these, the £78m Faraday Institution14, The facility will also provide support
create world-leading battery and scale-up. This approach – joining was announced on 2 October 2017. for training and skills development.
manufacturing capability in the UK; up these three stages to market in a The institution brings together It will work with partners across
``
establish a UK battery cell and way no other country has done – will the expertise and insight from UK education and business and, in
module manufacturing facility to drive a significant change in the way its seven founding partner particular, the Faraday Institution,
support rapidly expanding demand the UK turns world-leading research universities, industry partners which has committed to leading
from UK vehicle makers; and into market-ready technologies. and other academic institutions to the establishment of a national
The Faraday Battery Challenge is a accelerate fundamental research curriculum for training in batteries.
``
leverage automotive batteries
to contribute towards the government investment of £246m to develop battery technologies. This centre is to be hosted by Coventry
effectiveness and efficiency of the over four years to help UK businesses The second of these centres is the and Warwickshire Local Enterprise
wider energy supply system. seize the opportunities presented National Battery Manufacturing Partnership in collaboration with
by the transition to a low carbon Development Facility15. The Warwick Manufacturing Group. This
The evidence gathered from the economy. It will ensure the UK leads follows a competition overseen
review provided the rationale for the government is investing £80m
the world in the design, development in this independent, open-access, by the APC and Innovate UK.
landmark Faraday Battery Challenge. and manufacture of batteries for state-of-the-art centre, which will The final element is the Faraday
the electrification of vehicles.
Faraday Battery Challenge be responsible for taking the most Battery Challenge Innovate UK
The Faraday Battery Challenge will This programme will be shaped not promising early and mid-range battery programme, which has £88m
support R&D in three stages across just by its projects but also by two new and development activities to the point secured from the Industrial
the technology spectrum, from critical national centres. The first of of being ready for manufacture. Strategy Challenge Fund.
18 19Industrial Strategy Automotive Sector Deal
To date, £40m of funding has been The government is investing £250m
awarded to 27 innovative projects through to 2021, matched by industry,
involving 66 organisations. These in collaborative R&D and developing
projects will improve production CAV testbed infrastructure.
techniques, operational performance Of this funding, £150m is being invested
and methods for recycling and the in collaborative R&D and feasibility
recyclability of battery packs. study projects. This includes self-driving
Shaping the future of mobility car trials in Bristol, Coventry and Milton
Keynes, and in Greenwich in south
CAVs have the potential to save lives,
London, which will conclude in 2018.
improve our travel experience and
deliver more accessible transport.
The UK has an opportunity to establish
a global leadership position in the
demonstration and deployment of
CAV technologies, building on our
competitive regulatory environment.
This must evolve with the times
to support the emergence of new
technologies and new business models.
The government will ensure the UK
continues to have one of the most
open environments in the world for
transport innovation and new services.
The government’s ambition is that
fully self-driving cars, without a human
safety operator, will be on UK roads
by 2021. We will make our regulatory
framework world-leading, including
updating our national code of practice
for the testing of automated vehicles
without a human safety operator, and
by working with the Law Commission
on proposals for a long-term regulatory
framework for self-driving vehicles.
20 21Industrial Strategy Automotive Sector Deal
due to the increasing complexity of workforce and leadership skills
vehicles whose sub-systems demand in companies and implement
the input of multiple suppliers, along streamlined business processes to
with increased customisation, and improve operational efficiency.
shorter vehicle lifecycles. Vehicle This single, scalable approach will allow
makers have well established supplier supply chain companies to undertake
support programmes in place improvement projects ranging from
and invest substantial resources six months to three years. This will
in sharing their knowledge and have the double benefit of making
expertise in lean manufacturing and UK suppliers more internationally
employee development with their competitive; supporting the industry’s
strategically important suppliers. ambition to increase the value of UK
The automotive industry is looking to content in domestically produced
expand this support, building on the vehicles to 50 per cent by 2022
success of its Long Term Automotive and be more able to win business
Supply Chain Competitiveness in growing markets abroad.
(LTASC) programme. It is leading The government is committed
on the development of a national to investing in an industry-led
manufacturing competitiveness supplier improvement programme
and productivity improvement that will be rolled out in 2018.
programme. This will develop
Business Environment Future proposals
We have prioritised an initial set of boundaries further, and if the UK wants
Supply chain competitiveness The AIO has been successful in proposals, which have been agreed to win in this market it must become
and productivity improvement securing investment from strategically between the Automotive Council more efficient in getting products to
UK vehicle makers have worked closely important suppliers able to produce the and the government. It is intended market. The rise of digital design and
with the government’s Automotive high value components that the UK’s that this deal is the first of several testing has the potential to reduce
Investment Organisation (AIO) since world-class vehicle-makers require. with the sector. The Automotive the cost and time of developing a
2013 to increase the production This has underpinned the increase in Council is already considering its vehicle, and UK-based firms need
capacity and capability of UK suppliers. the value of components purchased priorities for 2018. These include not just to keep pace, but to lead in
Research by the Automotive Council from UK suppliers from 36 per cent for example, new work on digital areas where we have a comparative
in March 201516 identified an additional of 1.3 million vehicles in 2011 to 44 per design and manufacturing. advantage. A formal proposal is being
£4bn per annum of components that cent of 1.7 million vehicles in 201717. developed by industry and will be
Digital design and manufacturing presented in 2018. A further range
UK vehicle makers would consider However, there is agreement that
sourcing from UK-based Tier one It is not just how a car is powered and of proposals in other areas are also
coordinated action is required to
suppliers, i.e. those suppliers who supply driven that will change the industry; under consideration in the Automotive
improve the competitiveness of
direct to the vehicle maker – subject to it is also how a car is designed and Council and its working groups for
businesses further down the supply
their international competitiveness. built. The already highly competitive prioritisation in the year ahead.
chain. This is of particular importance,
automotive industry is pushing the
22 23Industrial Strategy Automotive Sector Deal
Places
Shaping the future of mobility
The government is investing £100m These projects form part of a cluster
to create a world-leading ecosystem that is the first of its kind in the world,
for testing CAVs using existing UK running from the UK’s automotive
assets and capabilities including heartlands in the West Midlands,
communication technologies, virtual through our innovation centres near
environments, controlled environments, Oxford and Milton Keynes, to London.
and public testing environments. This This cooperative approach brings
is being coordinated through the new together the best of the UK
Meridian industry brand, which will also automotive sector with strong
seek to convene UK industry around a adjacent industries including fintech,
set of long-term strategic priorities. artificial intelligence and insurance.
Case study: work on CAVs by Streetwise
he Streetwise consortium, led by the
T Streetwise will demonstrate that
autonomous technology developer self-driving vehicles are able to
FiveAI, secured a government R&D safely co-exist with other road
grant of £12.8m to launch a fleet users, and operate in complex
of self-driving passenger service urban environments.
vehicles that will operate alongside Many globally leading AI academic
London’s existing transportation in research groups are based in
2019. FiveAI leveraged this to attract the UK. This project establishes
a £14m venture capital investment. the UK as a global leader in the
commercialisation of the science in
autonomous vehicle technology.
24 25Industrial Strategy Automotive Sector Deal
Case study: Advanced Propulsion Centre – APC8
The Advanced Propulsion Centre to secure international investment.
platform (APC) was established The APC8 winning projects are:
as a 10 year £1bn joint investment E-Prime – A project led by Ford’s
between government and industry. UK based Global Manufacturing
The platform, including the new Engineering team working with
APC8 winning projects supports 36 machine tool supply chain partners to
major R&D projects worth £589m, develop process and equipment for
targeting a saving in excess of 34m production of ultra-high volume next
tonnes of carbon dioxide and creating generation electrified powertrain
or safeguarding 20,500 jobs. In systems. This will include the
addition to its core competitions, development of new digitisation tools
APC supports industry consensus for both the design, operation and
road-mapping, the acceleration of monitoring of manufacturing plants.
companies developing cutting-edge
technology (especially small and ACe-Drive - Development of GKN’s
medium enterprises), technology- future generation e-Drive system
focused academic communities platforms, utilising high speed electric
(spokes) and the development machines and advanced high speed
of future supply chains. power electronics. In conjunction with
Nottingham University, this project
The three successful projects aims to further grow UK capability
awarded in the latest competition, in the design and manufacture of
APC8, reflect the industry’s drive eMachines and power electronics.
toward greater electrification of
future vehicles. Supported by grants VERBIUS – Development of future
state of the art electric hybrid vehicle The Advanced Propulsion Centre ‘Spoke Network’
worth in excess of £26m, these
projects align with Industrial Strategy systems for JLR, in conjunction with The APC has established communities This network supports the transfer
universities and businesses across the of excellence across the country of technology between our research
investments ensuring that the UK
UK. The project aims to significantly centred around key universities and industrial base to accelerate the
continues to reap the benefits from improve the vehicle system efficiency
the transition to ultra-low and zero- with expertise in strategic low commercialisation of cutting edge ideas.
through utilisation of innovative carbon propulsion technologies.
emission vehicles by continuing to electronic systems and componentry.
build the agile, innovative and cost
competitive supply chain needed
26 27Industrial Strategy Automotive Sector Deal
Implementation plan
Key deal activities
Date Milestone
Oct 2017 Faraday Institution announced
Nov 2017 National Battery Manufacturing Development Facility
announced
Faraday Battery Challenge Innovate UK programme –
phase 1 competition winners announced
Jan 2018 Automotive Sector Deal announced
Faraday Battery Challenge Innovate UK programme –
phase 2 competition opens Governance
CAV simulation and modelling competition Implementation of the Automotive Sector Deal will be overseen
by the Automotive Council, which will review progress
APC9 competition opens against objectives at each of its quarterly meetings.
Separate governance groups for the Once Sector Deals enter the
Spring 2018 CAV Testbed phase 2 Faraday Battery Challenge, Meridian implementation phase, bi-annual
and the Supply Chain Competitiveness progress reports will be provided
Summer 2018 CAV4 competition and Productivity programme will be for ministers in the Department
established to oversee their respective for Business, Energy and Industrial
Jan 2019 Annual review of the Automotive Sector Deal parts of the Sector Deal and will inform Strategy. The Automotive Council
the Automotive Council of progress. will be subject to challenge sessions
from government ministers on an
annual basis as part of the overall
Sector Deals programme.
28 29Industrial Strategy Automotive Sector Deal
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30Industrial Strategy Automotive Sector Deal © Crown copyright 2018 This publication is licensed under the terms of the Open Government Licence v3.0 except where otherwise stated. To view this licence, visit nationalarchives.gov.uk/doc/open-government-licence/version/3 or write to the Information Policy Team, The National Archives, Kew, London TW9 4DU, or email: psi@nationalarchives.gsi.gov.uk.Where we have identified any third party copyright information you will need to obtain permission from the copyright holders concerned. This publication is available from: www.gov.uk/beis Contact us if you have any enquiries about this publication, including requests for alternative formats, at: enquiries@beis.gov.uk 32
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