Driving the automotive transition

Innovation, collaboration and government support will be key to the transport sector’s net zero transition.

That was one conclusion of a panel of industry specialists who discussed the upcoming challenges and possibilities for transportation at the Innovation Zero 2024 conference at London’s Olympia.

The panel concluded that the UK has the potential to lead the automotive and transport sector through innovation, but government support and collaboration in public-private partnerships will be necessary to anchor manufacturing facilities and secure supply chains.

The transition must be done at pace, because it’s being done at pace elsewhere in the world

Richard Hill, Head of Mobility and Logistics
NatWest Group

Consistency in policy and funding is also crucial, and digital tools will be important to help drive down costs and track emissions.

Richard Hill, our Head of Mobility and Logistics, who was on the panel, said: “The transition opportunity is enormous – worth hundreds of billions globally – and I think we should all be here to support that in whatever shape or form.

“It’s not just the transition from internal combustion engines to electric vehicles, although that’s a huge element of decarbonising towards 2050. We need to see new modes of transport coming through and we are starting to see lots of innovation in the micromobility space and autonomous and connected vehicles are developing at pace too.

“But ultimately, we need new infrastructure to support the enormous shift and transition towards net zero. The scale is unprecedented.”

The panel highlighted challenges to the large-scale transition to electric vehicles (EVs), including cost, consumer trust, and infrastructure.

Collaboration to support innovation

Martin Wood, Chief Adviser for Industrial Transformation at the Office for Investment, called for continued public-private partnerships and collaboration to support innovation in the sector, and he highlighted the UK's unique selling point – a major economy with a legally binding net zero commitment.

While he acknowledged that the UK would have to catch up to other developed economies who invested in the transition earlier, he pointed to the Government’s £2bn investment in charging infrastructure as well as its zero-emission vehicle (ZEV) mandate as evidence of its wholehearted backing.

He said: “Infrastructure is one of the biggest challenges as we move from a hydrocarbon-based economy to a renewable energy, electricity-based economy. But I think the support is there and the vision is there. But I genuinely think it’s in a really good place right now.”

Alex Veitch, Head of Policy for the British Chambers of Commerce, described the UK auto sector as diverse, export-oriented, and vital to the economy, and he emphasised the importance of Chambers of Commerce in attracting investment and supporting UK businesses in the sector.

He also discussed the role of government in “creating” the EV market through policy and legislation, and called on governments to support the markets they create.

He said: “When a government is making a market and is talking to consumers about buying a heat pump, or choosing an EV at the retail end, we really want them to champion the market they have created. We need governments to incentivise green products because that’s how we make them mass market.”

Anchoring the supply chain

Philippa Oldham, Stakeholder Engagement Director at the Advanced Propulsion Centre UK, described how the centre supports innovation by small to medium-sized enterprises (SMEs) including funding, collaborative research opportunities and an accelerator programme.

She highlighted that since 80% of the EVs produced in the UK were exported, it was vital that the UK remains competitive with Europe.

“It’s about really anchoring manufacturing facilities and keeping that supply chain here, and making sure we retain the businesses and those skills,” she said.

Richard added that the collaborative support needs to focus on a whole solution and include multiple partners from across government, and private and public sectors.

“The main challenge is the transition must be done at pace, because it’s being done at pace elsewhere in the world,” he said. “We’ve got the skills, we’ve got the creative flair, and we mustn't lose that advantage.”

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