Unlock automotive innovation to turn British ideas into jobs, industry urges
Britain could turn its automotive innovation strengths into fresh investment, high value jobs and growth with targeted government support and lower business costs, according to a new report published today by the Society of Motor Manufacturers and Traders (SMMT). Four in five (83.9%) automotive businesses surveyed would be more likely to begin or expand UK research, development and innovation (RD&I) investment over the next five years – with four in 10 (38.7%) significantly more likely – under these conditions.
The report, Turning Automotive Innovation into UK Investment, highlights substantial untapped growth potential in a sector already investing £5.3bn annually in the UK. From EV batteries and motors to lightweight materials, self-driving software, AI and cybersecurity, automotive innovation offers opportunities to develop British products and services for customers around the world.
The UK starts from a position of strength. Nearly three quarters (74.2%) of respondents identified its talent pool as a key advantage for UK-based automotive RD&I, alongside government funding support (52.5%) and collaboration with world-class universities (58.0%). These capabilities provide a strong foundation to develop new technologies shaping cleaner, safer and more connected mobility.
Crucially, the opportunity now extends beyond research and development. By supporting the UK’s flourishing auto RD&I sector to grow in Britain and bring new products to market, significant commercial value would be retained – securing new production opportunities, stronger supply chains and skilled jobs nationwide. With four in five of the UK’s 24 auto R&D centres operating in industrial hubs outside of London and the South East, growth is also likely to extend across the country.
Realising this opportunity, however, requires making the UK a globally competitive location, not just for developing business ideas, but also for commercialising them. Given respondents identified the difficulty of scaling their new tech from the ‘lab’ to commercial production in the UK as the biggest barrier to growth,5 a stronger route to market is needed – else Britain risks seeing new tech developed here generating investment and economic benefits elsewhere.
Ahead of the UK’s 10 Year Plan due for next year’s Spending Review, SMMT is urging government to prioritise a targeted, multi-year pathway to support early-stage auto RD&I into its next phase of growth – demonstration, pilot manufacturing and scale-up – expanding the sector’s existing investment. Lower industrial energy costs and faster grid infrastructure delivery would further enhance the UK’s proposition, particularly for energy-intensive advanced manufacturing – transforming the country’s natural innovation strengths into commercial value, industrialisation and skilled jobs fit for the future.
Mike Hawes, SMMT chief executive, said, “British ideas should create British jobs and growth, as well as global opportunities. Our automotive engineers, businesses and universities are developing technologies the world needs, and this research shows a clear appetite to invest more here. But our globally renowned innovation capabilities are only half the opportunity – we must also make the UK a place where ideas are turned into production. Long-term funding, access to growth finance, and competitive energy costs can turn British breakthroughs into thriving businesses and exports, securing more of the economic benefits here in the UK rather than overseas.”