A new deal between the UK Government and the automotive industry is promising major funding for innovation and technology including electric vehicles and autonomous cars.

The UK Government and representatives of the automotive industry have agreed the first Automotive Sector Deal based on supporting the development of low carbon, electric and connected and autonomous vehicle technologies of the future. 

The deal forms part of the UK Government's industrial strategy and contains plans to improve the UK supply chain. This includes boosting productivity and enabling automotive manufacturers to use a greater proportion of UK-based suppliers in future.

The Automotive Sector Deal will see the Government and industry collaborating and investing about £250 million to develop and manufacture electric vehicles, including battery technology. There are plans to create a ‘world-leading’ testing environment for connected and autonomous vehicles, along with investment in a new industry-led programme that aims to raise the competitiveness of UK suppliers.

Business and Energy Secretary Greg Clark said: "In the next ten years, the sector will see more change than in the previous hundred. From the engines that power our cars, to the way we control them and our attitudes to owning them, technology is changing what the industry looks like and where money can be made.  As we open the automotive sector's next chapter, we will continue to work with industry to make sure the technologies of tomorrow are developed, tested and manufactured right here in the UK."

Along with the deal, the Government has announced its latest round of Advanced Propulsion Centre funding, which will see a £26.4 million investment, which will be matched by the industry, in three low-carbon vehicle projects involving Ford, GKN and Jaguar Land Rover.

The deal comes at a time when the automotive industry is facing a period of unprecedented change with the rise of electric, connected and autonomous vehicles and against the backdrop of Brexit.

Expert Opinion

“The Automotive Sector Deal presents a superb opportunity for the sector as it places automotive as the centre of the Government’s Industrial Strategy. “The investment and collaboration will help the UK to be at the forefront of the innovation and development of electric, connected and autonomous vehicles. The deal includes up to £32 million of new joint funding for an industry-led supply chain competitiveness programme. This should certainly be welcomed as growing the UK supply chain and making it internationally competitive will promote innovation and competitiveness. “This investment will help the UK to remain competitive in an unsettled market, making it an attractive destination for global business looking to develop product and service offerings incorporating innovative technology.”