This week, government published its Industrial Strategy Automotive Sector Deal. Government and industry will invest around a quarter of a billion pounds to develop and manufacture electric vehicles. The deal also aims to create world-leading testing environment for Connected and Autonomous Vehicles.

The Sector Deal was finalised by Rt Hon Greg Clark MP, Secretary of State for Business, Energy and Industrial Strategy and Nigel Stein Chief Executive GKN plc and Automotive Council Chairman.

Government has announced £26.4 million of investment, match-funded by industry to total £52.8 million, to help develop the next generation of driverless and low-carbon vehicles, with flagship projects led by Ford, GKN and Jaguar Land Rover.

Business Secretary Greg Clark said, “For decades, the UK’s automotive industry has powered our economy forward.

“Today, automotive firms from around the world choose to set up shop here, citing our history of excellence, skilled workforce and world-leading supply chains.

“In the next 10 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.

“The automotive sector will shape our response to the grand challenges articulated in our industrial strategy, such as clean growth and the future of mobility – transformations which will forever change how people live, work and travel.”

Government Commitments

The Sector Deal brings a number of long-term joint commitments between government and industry.

Low-carbon automotive technologies

  • through the Advanced Propulsion Centre government is investing £500 millionover 10 years to 2023 to research, develop and industrialise new low-carbon automotive technologies in the UK, with industry providing £500 million match funding for collaborative R&D projects

Automotive research and development

  • government is investing up to £225 million from 2023 to 2026 to support R&D in the sector, with industry providing equivalent match funding

Transitioning to ultra-low and zero emission vehicles

  • through the Faraday Battery Challenge, government is investing £246 million to make the UK a world leader in the design, development and manufacture of batteries for the electrification of vehicles

Connected autonomous vehicle (CAV) technology

  • £250 million of government investment to position the UK as a global leader in Connected and Autonomous Vehicles (CAVs) development and deployment. This includes:
    • £150 million for collaborative R&D projects from which, to date, £100 million has been committed to 51 projects, with industry contributing a further £56 million
    • £100 million for CAV testing infrastructure, £51 million of which has so far been committed to 4 infrastructure projects; 2 ‘controlled’ testing facilities and 2 ‘live’ public testing facilities
  • government will be launching a £15 million simulation and modelling R&Dcompetition on the 16 January to accelerate the development of connected and autonomous vehicles

Supply chain competitiveness and productivity programme

  • £16 million of government funding, subject to business case, for an industry-led match-funded national supplier competitiveness and productivity improvement programme to support a sustainable and internationally competitive UK supply chain for future volume vehicle production

Industry Commitments

Advanced Propulsion Centre

  • £500m match funding for collaborative R&D projects
  • match funding to support APC and its core activities.

Automotive R&D

  • £225m match funding for collaborative R&D from 2023 to 2026.

Transition to ultra-low and zero emission vehicles

  • £80m funding over the working lifetime of the National Battery Manufacturing Development Facility
  • £59m match funding for the Faraday Battery Challenge Innovate UK programme.

Shaping the future of mobility

  • £56m funding for the CAV collaborative R&D projects to date;
  • match funding for the £100m CAV testing infrastructure.

Government action to support the automotive sector ` £23m hydrogen transport

Business environment

  • £100m new funding for the PlugIn Car Grant to help consumers buy battery electric vehicles.
  • From April 2019, Government will exempt zero-emission capable taxis from the VED supplement that applies to expensive cars, consulting in advance on how to define such taxis.
  • Provide a Benefit in Kind exemption for employees offering free charging for electric vehicles at work, to come into effect in April 2018. This will support the roll out of electric vehicle chargepoints at workplaces
  • 25% of cars in central Government department fleets will be ultralow emission by 2022, and the Environment Agency will ensure all its cars are ultra-low emission by 2025, and stop buying or leasing diesel cars immediately


  • £23m hydrogen transport programme to increase the number of publicly accessible refuelling stations and increase the uptake of fuel cell vehicles.
  • £20m to support vehicle-togrid projects in order to create a smarter energy system, while increasing the numbers of electric cars on UK roads.
  • A new £400m electric car Charging Infrastructure Investment Fund (£200m new Government investment to be matched by private investors).
  • £40m R&D funding from the National Productivity Investment Fund (matched by industry), to support new charging technologies for on-street and wireless charging projects.

The full document is available online: