The UK government has announced a whopping £2 billion investment in the automotive industry. Notably, this fund will facilitate the development of electric vehicles (EVs).
Aside from this, the investment is a significant step towards the country's transition to a net-zero future. It is also worth noting that the investment is part of a larger £4.5 billion investment program for top manufacturing industries.
With this investment, the UK government is hoping to create more skilled and higher-paid jobs in new industries. Aside from playing a vital role in the UK's economic growth, the automotive sector is expected to facilitate the government's commitment to reaching net-zero emissions by 2050.
The government plans to invest £2 billion in the automotive industry over the course of 5 years. However, this fund will be specifically used for the advancement of the car industry. In other words, £2 billion investment will be used to make innovative EVs.
This funding will also be used for developing lightweight electric vehicle powertrains for heavy goods vehicles and hydrogen fuel cells for buses. Also, it will be used for the development of motorsport technology built into highly efficient motors for cars and vans.
British Finance Minister Jeremy Hunt recently outlined the investment in his Autumn Statement. Hunt said: "We will use £4.5 billion to leverage more capital from the private sector. This in turn will boost our economic growth and create more skilled, better-paid jobs in new industries. These industries are here to stay."
Moreover, Hunt told reporters that the government didn't want to simply reallocate previously announced spending. According to Hunt, the UK preferred targeted support rather than blanket subsidies. "We are not going to get caught up in a global subsidy race," he noted.
Reuters analysis of OECD data shows that business investment in the UK was 4 per cent above pre-pandemic levels during the third quarter. While this performance was better than Germany's, it was slightly worse than the US and France.
The director of IPPR's Center for Economic Justice George Dibb believes it is the right time to clarify the UK's strategic objectives. This includes "developing green manufacturing and the services needed for the future and then use all available tools to achieve this," he added.
Key projects
The investment will be used for the development of three innovative projects. The aim is to expedite the transition to a net-zero future. These projects include:
Hydrogen Fuel Cells for Buses: The UK automotive industry plans to invest £11.2 million in the development and manufacture of low-cost hydrogen fuel cell bus technology in Northern Ireland.
The funding will also come in handy for the development of a hydrogen centre of excellence with Wrightbus in Ballymena. To those unaware, Wrightbus is a Northern Ireland-based bus manufacturer.
Lightweight Electric Vehicle Powertrains: These powertrains will help heavy goods vehicles and vans reduce emissions and improve efficiency in the transportation sector.
Motorsport Technology: Cars and vans will use high-efficiency motors that will not only enhance their performance but also reduce emissions.
How will this impact the economy and jobs?
The UK automotive industry will use these transformational programs to create and safeguard about 10,000 jobs across England, Northern Ireland, Scotland and Wales.
Furthermore, the investment will play a vital role in generating high-skilled jobs in the green economy and helping uplift communities across the UK.
The country is currently at the forefront of electric vehicles and advanced propulsion systems courtesy of its commitment to investing in advanced technology and innovative projects.
🚗 Protecting the UK’s automotive industry
— UK Prime Minister (@10DowningStreet) November 24, 2023
🧑🔧 Supporting thousands of jobs
🌎 Helping us reach Net Zero
This investment of up to £2 billion by @Nissan will cement the UK’s position as a global leader in Electric Vehicle manufacturing and grow the economy. pic.twitter.com/qr3zIpPqhz
This investment will also boost the application of greener technology in lorries and buses while giving the UK a competitive advantage in the global market.
To recap, Nissan recently announced a £2 billion investment into the UK's electric vehicle production. Additionally, UK Prime Minister Rishi Sunak announced £29.5 billion of private funding for new UK projects during the 2023 Global Investment Summit.
