Event review: Low Carbon Vehicle Partnership Parliamentary Reception – opportunities for UK supply chain companies, but they need to grow
The Low Carbon Vehicle Partnership (LowCVP) hosted an event in the House of Commons on 9 March to present the findings of a report by Cambridge Econometrics entitled ‘Fuelling Britain’s Future’, about the economic impact of low carbon vehicles in the UK. The report shows that moving to low carbon vehicles makes economic and environmental sense for the UK and its motorists, and there are opportunities for automotive supply chain companies developing low carbon technologies. However one key change is needed for the UK to start rivalling countries such as Germany – we need to transform from a nation of small SME supply chain companies to recreate more home-grown larger Tier 1s
The LowCVP Parliamentary event was hosted by Richard Burden MP, Shadow Transport Minister and included speakers such as Baroness Verma, Minister, Department of Energy & Climate Change and Jerry Hardcastle OBE, Global Chief Marketability Engineer, Nissan.
The ‘Fuelling Britain’s Future’ report looks forward, and follows on from the LowCVP’s retrospective study published last year, ‘Investing in the Low Carbon Journey’, which found that the last ten years of a consistent policy focus on cutting carbon has helped to stimulate a renaissance in the automotive sector while improving fuel efficiency at the most rapid and sustained rate ever.
Ten years ago environmental regulations were seen as a threat to the industry; today, sales of electric vehicles have recently quadrupled. We’re still talking about relatively low numbers of EVs, but we can see that the Passenger Car Technology Roadmap is becoming reality. We’re seeing the start of the move to increased numbers of hybrids, plug-in hybrids and pure EVs. The internal combustion engine will continue to exist, but it will become downsized and lighter, and it will no longer be the primary propulsion system; ICEs will become electrified.
New cars will become more expensive to buy due to the incorporation of low carbon technology, but they will become much cheaper to refuel; by 2030 fuelling the average new low carbon car could be £600 cheaper than for the average car today.
So consumers will need to move to a total cost of ownership model, taking into account the initial purchase price as well as the running costs of the vehicle during their ownership.
Overall, the move to low carbon vehicles will be good for the consumer, good for the environment and health (from the point of view of reduced CO2 emissions and improved local air quality), and the UK will be spending less due to reduced oil imports.
However the automotive industry is no longer a standalone entity; we need to move towards a broader perspective involving the energy industry, addressing issues such as grid decarbonisation and smart energy systems.
In summary, there are increasing opportunities for automotive suppliers in the UK if they develop low carbon technologies. However there are two issues.
Firstly, there aren’t enough skilled engineers for the industry – particularly young women engineers. One debate at the event centred around the need for a change in communication. Scrapping the use of the term ‘engineering’ and instead using words such as ‘plan, design and create,’ has resulted in a huge increase in females applying for university courses.
Secondly, the UK may have a diverse collection of SME automotive supply chain companies, but they’re not large enough to compete with European Tier 1s. Eman Martin-Vignerte, a director at Robert Bosch Ltd, highlighted this issue and suggested that UK SMEs could work together in order to create organisations with the size and financial capability to supply 10-20 million parts per year, and so avoid OEMs seeing them as a risk. An opportunity for NAA member companies…?