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Mainstream UK automotive is in the doldrums, posting historically low numbers for production, exports and investment. Output in the first six months of 2019 fell by 20 per cent and new investment in auto slumped to just \xa390 million for the first six months \u2013 average annual investment in the past seven years has been \xa32.7bn, according to the Society for Motor Manufacturers and Traders.

The reasons go beyond Brexit \u2013 although preparing for a No Deal Brexit is a major factor \u2013 and they include a slowdown in global car production, the UK government\u2019s decision, with France, to make all new cars zero-emission from 2040, the China-US trade/ tariff negotiation and other factors. The effect of these market forces on the automotive segments the UK is best known for \u2013 sports cars, motorsport and luxury cars \u2013 is not clear, but any road-legal car will come under the diesel ban by 2040. Long term, the look of UK automotive will change radically.

Growth will, however, come from new vehicles with an electric, hybrid electric or hydrogen powertrain, a group known as \u201clow carbon vehicles\u201d. This segment is busy, full of both mature players and start-ups, established and new technologies and university and Catapult research centre funding. In the last 12-18 months alone, the construction of five new, large battery manufacturing and research facilities have been announced or completed.

A good example is Arrival, a new company that makes an all-electric van and develops the software for managing the powertrain, which has contracts to supply vans to the Royal Mail and courier company UPS.

Building a new supply chain
As well as the motors, batteries, inverters, transmissions and battery chargers these vehicles need, there are \u2013 and will be more \u2013 subcontractor opportunities in fabricating frames and housings, chassis\u2019, steering columns, drives and axles, brakes, and electro-mechanical suspensions, let alone the lights, seats, dashboards and interiors for these vehicles. The charging infrastructure will require manufacturing, planning and servicing. This will involve vehicle manufacturers, charge point manufacturers and suppliers, network operators, energy retailers and distributors, local authorities, fleet operators, fuel retailers and highway authorities.
The Advanced Propulsion Centre (APC) in Milton Keynes was established to accelerate low carbon vehicle technology, those without internal combustion engines (ICE). It says UK electric automotive has a bright future, leveraging on the strengths of its ICE industry and the many nice vehicle companies. \u201cThe UK is well-positioned to be at the forefront of the development and production of low carbon vehicle technology,\u201d said an APC spokesman, who points out that Britain has a strong supply chain to support its IC vehicle industry with around 2,500 suppliers feeding into eight major premium and sports car manufacturers, nine bus and coach manufacturers, engine manufactures and over 60 specialist niche vehicle manufacturers.

In battery development and manufacture, the UK has a sound lead. Nissan has produced the successful LEAF and batteries for the LEAF in Sunderland since 2012, until selling the battery-making subsidiary to GSR Capital in 2017. Jaguar Land Rover is building a new Battery Assembly Centre at Hams Hall in Warwickshire. Set to produce 150,000 batteries a year, it is expected be the UK's most technologically advanced facility of its kind when it becomes operational next year.

Hyperdrive Innovation became the UK\u2019s largest battery manufacturing facility when it took on more space in Newcastle in July. HyperBat, a joint-venture between Unipart and Williams Advanced Engineering and the UK Battery Industrialisation Centre are two more examples (see box). UK transmissions specialist Xtrac is leading on the electrification of motorsport, developing innovative transmission technology.

Batteries charge up the chemicals sector

Batteries need chemicals. Lithium-ion has been the default technology for rechargeable batteries, but alternatives are being researched. The University of Birmingham is developing a way to replace the lithium with high capacity sodium-ion. \u201cAs we see electrification adopted, the UK is in a strong position to compete with a healthy chemicals supply chain and we already have some of the world\u2019s largest companies providing chemicals to the Asian battery market, for example,\u201d said the APC spokesman. \u201cIn Mitsubishi Chemical, the UK has one of the largest electrolyte manufacturers in Europe with the capacity to manufacture over half of the electrolyte material currently need for EU automotive li-ion batteries.\u201d In addition Vale, the largest miner of nickel in the world, has a UK refinery able to supple 40kt of battery-grade nickel and Phillips 66 \u2013 the largest supplier of needle coke (used to make anodes) outside of China \u2013 is manufacturing in the UK.\u201d