2025 feels like a year that has got off on the wrong foot. In January the European Copernicus Climate Service reported that 2024 was the first calendar year to pass the 1.5 degrees global warming limit. This seemed to ring true as the UK was hit by severe weather warnings, with many major incidents declared as flooding desolated the regions. At the same time across the pond the west coast of the US was hit by wildfires, exacerbated by severe droughts.
Next came the second inauguration of President Donald Trump into the White House. We saw him quickly retract the US green policies, including the revoking of the electric vehicle mandate and withdrawing from the Paris Agreement.
The market is displaying signs of being unsettled with data from the SMMT in February showing new car market sales had declined by one per cent, the fifth consecutive monthly drop. And light commercial vehicle (LCV) registrations also declined by 19.3%. However, battery electric vehicle (BEV) continue to rise with deliveries now accounting for one in four new car registrations. And electric van uptake grew to 55.1% and now accounts for 9.7% of the market share, but well short of 2025’s mandated 16%.
The BEV numbers are a positive as we shift towards the target of only zero emission vehicles on our roads. However, as we drive around our cities and motorways it is clear to see the uptake of more affordable EVs from manufacturers including SAIC, GWM and BYD. So, what is the outlook for UK-based OEMs and their associated supply chains manufacturing here in the UK? Are we to believe the media reports that the UK automotive sector is no longer competitive?
What needs to happen to flip this narrative on its head? Where are the real opportunities? Or do we just resign to the fact that the sector is doomed?
One answer is to get out there and champion what your business and UK manufactures are doing to address this. In 2013 the Advanced Propulsion Centre (APC) was set up to support the automotive sector with its transition to zero emission vehicles. The funding that we facilitate on behalf of the Department for Business and Trade is there to accelerate innovation in these decarbonising technologies, leading to growth of businesses and transitioning of jobs. Initially our focus was on tailpipe emissions, but it is now clear that if we are to move the needle on mitigating or even reversing climate change, we need solutions that address the whole system.
Back in 2003, I was taught design for manufacturing, assembly and disassembly – where disassembly meant remanufacturing, repurposing and recycling. However, the reality over the last 20 years of working across multiple sectors is that this is not a prioritised approach for businesses largely due to cost and time pressures.
However, it seems the tide is changing, and this circular approach is one we are seeing through our funded projects. One example is the RECOVAS project which has just concluded after four years. The project included nine partners across 11 workstreams and introduced a new circular supply chain, by developing the infrastructure to collect and recycle electric vehicles and their batteries.
The result is significant benefits and opportunities to partners. These include a planned £40m investment for European metal recycling (EMR), into a site with the potential of shredding 30kt/yr for metal recovery. Project partner Autocraft Solutions has transitioned its business from solely focusing on remanufacturing and refurbishing of engines to extending its offering to provide the same high level service to address the gap in the market to address battery repairs by developing a mobile repair unit to support multiple OEMs both in the UK and across Europe.
Another example of this circular approach is Ionic Technologies, a 2014 spinout from Queens University Belfast (formally Seren), which has developed new techniques to recycle permanent magnets (used in motors) using a ‘revolutionary’ process for the separation and recovery of rare earth elements from mining ore concentrates and waste magnets.
This removes the need for further extraction of these materials but importantly it offers a localised solution to the permanent magnet supply chain, currently monopolised by China. Access to these materials means that new relationships, including one with Ford UK who are working to link Ionic Technologies into its electrification supply chain. This could be a part of the jigsaw boosting their UK capability potentially linked to their Merseyside Halewood facility making e-drives.
Localisation is clearly becoming a priority within the sector, and early in 2025 Nissan and the Japan Automatic Transmission Company (JATCO) announced they had secured a £50 million investment deal in partnership with the government to create a new manufacturing plant in Sunderland. This site will help create 183 new high-value jobs in the region and support over 400 in the wider supply chain. It will also establish JATCO’s first and only European plant and will produce three-in-one electric vehicle powertrains for Nissan’s neighbouring Sunderland plant.
As an organisation we have a technology neutral stance as we recognise that you need the right technological solution for the job. A visit to Wrightbus in Northern Ireland and the close out of its NextGen FCEV project showed the great engineering capability we have with production of hydrogen vehicles. Wrightbus unveiled its Streetdeck Hydroliner Gen 2.0, a double decker hydrogen fuel cell bus built in its Ballymena factory. The project has produced a vehicle which is now more fuel efficient, has a greater range, costs less and can carry more passengers than its predecessor. It is also easier to maintain and service, with an impressive 66% increase in time required between fuel-cell refurbishments.
The 2024 Autumn Budget saw the Chancellor confirmed £2bn of funding for the automotive sector over the next five years. This demonstrated the commitment that the government has for the sector. So how do we ensure that this money is transitioned to our businesses that will deliver growth to the economy?
We need to be questioning why we are digging particular materials out the ground, finding ways to improve the efficiency of processing them, and understand more about who is going to use them in what product and for how long and then when we are finished with them what do we do to dispose of them? Examples within this blog demonstrate that within the UK we have the businesses and capability to deliver solutions. It is not only about supporting market policies but making sure we are capturing new markets driving export of great products.
The world is in a state of flux, but the UK has an opportunity to build on its strengths and champion the diversity it has in capability. Supply chain resilience is an opportunity that we have, so commitment to supporting growth for our businesses is something that the APC can help with. We are here to help the automotive sector to innovate, grow and firmly anchor itself to a net zero future.
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