Low carbon innovation paving the way for electric vehicles

In June 2019, the UK government amended the Climate Change Act (2008) and set a new target of achieving net zero greenhouse gas emissions by 2050. This made the UK the first major economy in the world to legislate for Net Zero. An important aspect to achieve this target is the creation of ambitious actions, as well as innovative technologies within relevant industries. The automotive industry is of particular importance in reaching this target and the UK government’s commitment to support low carbon innovation within this industry provides opportunities for Swedish companies offering solutions for the Electric Vehicles (EV) sector; including EV manufacturing, charging infrastructure and battery/energy storage.

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The British automotive industry is a vital part of the UK economy. It has a turnover of over £82bn and adds £18.6bn of value to the UK economy. However, with cars and vans accounting for almost a fifth of emissions, the UK is taking decisive action to end the sale of new fossil fuel-operated cars and vans by 2030. In addition, all vehicles will be required to have substantial zero emissions capabilities (for example, plug-in and full hybrids) from 2030 and be 100% zero emission from year 2035.

There has been a recent increase in demand for EVs in the UK. By the end of 2018, there were 200,000 ultra-low emission vehicles (i.e. battery and plug-in EVs). In 2020, new EV registrations increased by 300% from 2019. The number of pure-electric and plug-in hybrid EV models in the UK has also increased significantly, with many of the country’s top automotive manufacturers offering a diverse range of EV options. 

It is expected that demand for EVs will continue to increase as the UK moves closer to its net zero target. This creates an opportunity for Swedish EV manufacturers to expand their operations and enter a growing market that can provide significant commercial opportunities. 

In order to accelerate the transition to electric vehicles and meet future demand for EVs, the development of comprehensive EV charging infrastructure is paramount. The UK’s EV charging market has been continually developing, with new charging points being added daily. However, the number of charging points will need to increase further to match the rising number of EVs on the road, as range anxiety (i.e. the fear over the distance EVs can travel between charges) is often cited as one of the key barriers to people opting to buy EVs. In an attempt to address this issue, the Climate Change Committee (CCC) commissioned a study in 2018 to assess future demand for the UK’s electric vehicle public charging network. The report concluded the following: the number of rapid chargers located near the major roads network needs to expand from 460 in 2016 to 1,170 by 2030; the number of public chargers needed for ‘top-up charging’ needs to rise from 2,700 in 2016 to over 27,000 by 2030; and nearly 29,000 charging points are needed across the UK by 2030, of which around 85% of these should be fast (22kW) or rapid (43+kW) chargers. 

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UK government’s EV Charging Infrastructure Investment Fund (CIIF).

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In 2020, new EV 
registrations increased by 300% from 2019.

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Number of charging points needed in the UK by 2030.

To meet this need for charging infrastructure, the UK government has created a £400m EV Charging Infrastructure Investment Fund (CIIF). The CIIF is aimed at supporting businesses in building EV charge points across the country and boost jobs in the industry; making it easier for the population to own an ultra-low emission car and helping to improve air quality and protect the environment. This initiative will be managed on a commercial basis by a private sector fund manager and government investment of £200m into the fund will be matched by private investors. In addition, the UK government’s Road to Zero Strategy outlines a number of ambitious measures including: pushing for charging points to be installed in newly built homes; developing a £40m programme to develop and trial innovative, low cost wireless and on-street charging tech; as well as the launch of an Electric Vehicle Energy Taskforce to bring together the energy and automotive industries to plan for the increase in demand on energy infrastructure that will result from a rise in the use of electric vehicles. The UK is also aiming at developing technology in new charging techniques, including: ultra-fast charging systems, wireless charging, Vehicle to Grid (V2G) charging, charging via roadside infrastructure (e.g. lamp-posts) and solar roofs.

Charging solutions for EVs
Sweden is home to some of the most innovative companies providing charging solutions for EVs. These include solutions for both public and private charging. By establishing a physical presence in the UK, Swedish providers of both public and private EV charging solutions can find an opportunity to satisfy the need for charging infrastructure in the UK. Companies can also make use of the government’s support programmes for developing further innovative charging solutions.  


Another area of importance to consider during the journey to net zero is the EV electrified supply chain, particularly batteries/energy storage solutions. It is estimated that the requirement for UK-based battery manufacturing capacity will be of 60-200 GWh per annum up to 2040. This is the equivalent of 4 to 13 battery cell production facilities operating at around 15 GWh per site. Up to 1.6 million battery electric vehicles are forecast to be produced per annum in the UK by 2040. By 2030 there is expected to be demand for manufacturing capacity from 70 to 100 GWh per annum in the UK.

Clusters

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The Faraday Battery Challenge
In order to meet this demand, the UK government has created the Faraday Battery Challenge (FBC). The FBC is a 4-year, £246m investment round in a key part of the government’s Industrial Strategy. It will deliver a coordinated programme of competitions with the aim of boosting R&D and expertise in battery technology. The FBC’s competitions are divided into three streams: research, innovation and scale-up. The programme is designed to convert the UK’s world-leading research into market-ready technology. In addition, the UK government has partnered with the automotive industry to create the Automotive Transformation Fund (ATF). The ATF is a long-term programme designed to enable the UK to build the world’s most comprehensive and compelling electrified vehicle supply chain. It offers a share of up to £1bn of funding for industrial research and capital projects. The ATF will support UK-based manufacturers in serving global markets, increasing skilled jobs and building the foundations for the automotive industry to transition to zero-emission technologies. The programme will support strategically significant capital and R&D investments in the UK and will begin by focusing on companies involved in the following technologies: batteries, including cells (‘gigafactories’); battery management systems; electric machines; drives and integrated power electronics; and fuel cells.

Swedish companies manufacturing and developing innovative battery/energy storage solutions should also consider the UK; both as an expansion market with growing business opportunities and as a partner for funding, researching and developing new technologies within the EV supply chain.


Different opportunities across all regions
It is important to note that different UK opportunities within the EV sector and its related areas are available across all UK regions. For example, in England, the majority of the country’s vehicle manufacturers are in the Midlands. Jaguar Land Rover and Aston Martin have manufacturing operations in the region, along with other leading brands based locally. It is also home to Toyota’s UK manufacturing operations. 

Wales is home to a thriving automotive and technology sector dedicated to finding solutions for power drive, energy storage, light weighting and ‘end of use’ solutions. This region is keen to engage with innovative companies within the aforementioned areas in order to support the movement to low carbon living.

Scotland is creating a sustainable decarbonised transport infrastructure and supply chain that is on track to meet its net-zero emissions target by 2045. By 2032 Scotland will phase out the need to buy petrol and diesel cars and vans and have plans to decarbonise Scotland’s railways by 2035. £2bn of long-term public finance has been allocated to a new Public Investment Bank to decarbonise Scotland’s economy. 

Northern Ireland has a vibrant and highly sophisticated advanced manufacturing and engineering sector, with automotive being an area of expertise. The automotive industry employs over 6,000 people in Northern Ireland and generated turnover of over £1bn last year. Within the sector there is a developing cluster of companies involved in EV technology. For example, Wrightbus, which manufactures hybrid electric, battery electric and hydrogen fuel-cell electric buses, recently delivered the world’s first double-decker hydrogen buses in Aberdeen, Scotland. 

Clusters

EV manufacturing

Birmingham, Solihull, Oxford, Swindon, Deeside, Halewood.

EV Charging Infrastructure

Aberdeen, Edinburg, Glasgow, Belfast, London, Bristol, Bermingham, Brighton

Batteries/Energy Storage
Belfast, Edinburg, Cardiff, Dorset, Bristol, Bath, Portsmouth, Leicester, Leeds