UK announces £2 billion investment in auto industry and EV ecosystem
The automotive industry gets the bulk of the £4.5 billion investment for supporting manufacture, supply chain and development of zero emission vehicles, and is among the eight strategic manufacturing sectors key to economic growth and energy security in the UK.
On November 17, the UK government announced £4.5 billion in funding for British manufacturing to increase investment in eight sectors including the key automotive sector, across the UK. The funding will be available from 2025 for five years, providing industry with longer term certainty about their investments.
Over £2 billion has been earmarked for the British automotive industry and £975 million for aerospace, supporting the manufacturing, supply chain and development of zero emission vehicles, and investment in energy efficient and zero-carbon aircraft equipment.
Alongside this, the government has committed to £960 million for a Green Industries Growth Accelerator to support clean energy manufacturing, and £520 million for life sciences manufacturing to build resilience for future health emergencies and capitalise on the UK’s world-leading research and development.
With the entire manufacturing sector making up over 43% of all UK exports and employing around 2.6 million people, this funding is targeted at the UK’s strongest, world leading sectors; including where the industry is undergoing fundamental changes to remain at the forefront of the global transition to net zero, like the move to zero emission vehicles in the automotive industry.
The funding forms part of Prime Minister Rishi Sunak’s pledge to grow the economy, and his focus on making decisions for the long-term, ensuring this funding doesn’t just focus on the most successful sectors today but looks ahead to how we keep pace internationally and build the UK’s expertise for the industries of the future.
Mike Hawes, Chief Executive of the Society of Motor Manufacturers and Traders (SMMT), said: "The announcement is an unequivocal vote of confidence in the UK’s critical automotive industry. Coming on the back of almost £20 billion committed by the sector in next- generation plants and technologies this year alone, it is indicative of the scale of investment such support can leverage and the result of substantial collaboration between Government and the industry.
“This additional Government investment reflects the fact the UK automotive sector has the talent, the innovation and the determination necessary to thrive in the face of fierce global competition. It will deliver benefits not just for the automotive sector but for the whole country in terms of growth, high value jobs and productivity. It also sends a powerful signal that the UK is open for business.”
The automotive-related manufacturing contributes £78 billion turnover and £16 billion value added to the UK economy, and typically invests around £3 billion each year in R&D. With more than 208,000 people employed in automotive manufacturing, and some 800,000 in total across the wider sector, the industry trades globally, with exports worth £94 billion accounting for 10% of all UK goods exports.
Business and Trade Secretary Kemi Badenoch said: “The UK is a global hub for advanced manufacturing, with world-leading automotive, aerospace and maritime sectors. This package builds on recent investment wins, such as the £4 billion gigafactory, and the £600m invested to build the next generation of electric Minis, and ensures that the government can continue to help create jobs, grow the economy, and secure the future of great British manufacturing.”
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