Out-Law News 2 min. read

Automotive 'sector deal' focused on a future of low carbon, electric and autonomous vehicles

The UK government and representatives of the automotive industry have agreed a 'sector deal' centred on supporting the development of low carbon, electric and connected and autonomous vehicle technologies of the future.

Hundreds of millions of pounds of funding from both the government and industry will be put towards the research, development and commercialisation of new technologies in those areas, including battery technologies to support electrification.

The sector deal (32-page / 978KB PDF), which represents an extension of the UK government's industrial strategy, also contains plans to improve the UK supply chain with a view to improving productivity and enabling automotive manufacturers to use a greater proportion of UK-based suppliers in future.

"Although we have a strong position, there is a major opportunity to deepen the supply chain presence for the sector in the UK," according to the plans. "We therefore intend to launch a new supply chain competitiveness and productivity improvement programme targeting areas where key businesses need to improve to match the best in Europe."

"The programme will provide bespoke training and streamlined business processes to help build the integrated supply chain we need in the UK to manufacture the future generation of vehicles at volume. This will support the industry’s ambition to increase the level of UK content by value in domestically-built vehicles to 50% by 2022," it said.

In the coming months, the UK government will also "publish a strategy for the transition to zero emission road transport, ensuring the UK continues to be a world leader in the development, manufacture and use of these vehicles", according to the sector deal paper.

Connected and autonomous vehicles expert Ben Gardner of Pinsent Masons, the law firm behind Out-Law.com, said: "The deal comes at a time when the automotive industry is facing a period of unprecedented change with the rise of electric, connected and autonomous vehicles and against the backdrop of Brexit."

"The supply chain competitiveness programme is big opportunity for UK automotive companies and all elements of the supply chain to come together, innovate and improve processes and challenge current industry norms. As the UK’s exit from the EU edges closer it will be imperative that UK businesses and their products and services remain competitive and highly productive, responsive and sustainable supply chains will help the UK to maintain its reputation as a key player in the global automotive sector," he said.

Gardner also said that the deal between the government and industry can also help keep the UK at "the forefront of the development, testing and future commercialisation of electric, connected and autonomous vehicles". 

"Further investment in the UK’s testing facilities, road infrastructure and research and development capabilities will again help the UK to remain competitive in a post-Brexit world and make it an attractive destination for global business looking to develop product and service offerings which incorporate future technologies," he said.

The UK government announced in November last year that it would update UK legislation to allow fully autonomous cars to be tested on UK roads without "a human safety operator" present in the vehicles with a view to such testing taking place by 2021.

Proposed new laws regarding driverless cars were introduced before the UK parliament in October 2017. The Automated and Electric Vehicles Bill makes provision for the registration of all driverless cars in the UK, and addresses how liability for accidents involving such vehicles should be apportioned. The Bill is also designed to support upgrades in UK infrastructure to support anticipated growth in the use of electric vehicles.

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