Recommendation 21

HM Government Accepted

A) The UK has a significant comparative advantage in the development of next generation battery chemistries for both transport and stationary storage applications, with the potential to take a leading role in their commercialisation and industrialisation. Key to the UK’s success in automotive R&D and innovation is the certainty of funding, providing industry partners with the confidence that they will receive support throughout the product development cycle, from the drawing board to market. This coordinated and targeted approach has helped position the UK at the vanguard of innovation. B) The Advanced Manufacturing plan sets out how we are reducing costs and removing barriers to boost competitiveness by continuing to improve the UK’s business environment. This includes making full expensing permanent, a £50 million 2-year apprenticeships pilot to explore ways to stimulate training in growth sectors such as advanced manufacturing and the announcement so far of 5 new advanced manufacturing Investment Zones. C) The UK Battery Strategy set out government’s intent to explore a range of policy options to deliver against our priorities, including through fifteen specific commitments. We will continue to convene a Battery Strategy Taskforce to advise on the delivery of the strategy, emerging risks to security of supply, and opportunities for the UK government. D) The Government will continue providing sustained, consistent, and targeted support for large-scale, long-term research and innovation activities, from early to late stage, across applications and key areas of the battery supply chain to ensure that the UK’s battery ecosystem continues to thrive. This includes £2 billion of capital and R&D funding for zero emission vehicles, batteries, and their supply chains to 2030. E) Building on the works of the Automotive Transformation Fund and the Advanced Propulsion Centre R&D programmes, Auto2030 will unlock investment in zero emission vehicles, batteries and the wider supply chain. It will support the R&D and the commercial scale up of innovative zero emission vehicle technologies. The comprehensive package of interventions includes: R&D Innovation grants, to develop strategically important zero emission vehicle technologies, boosting the UK’s long-term competitiveness. Scale-Up grants, to fast-track the development of near-commercial pilots for zero emission vehicle technologies, de-risking future capital investment. Capital transformation grants, to unlock investments in an internationally competitive zero emission vehicle supply chain, anchoring UK manufacturing. F) We will invest £11 million in 20 competition winners developing technologies across the battery value chain in areas such as artificial intelligence and digital tools to increase battery performance, future technologies such as lithium-metal anodes and sodium-ion batteries, and improved recycling technologies. This brings the overall budget of the Faraday Battery Challenge to £610 million since 2017. G) We will explore opportunities to promote the establishment of R&D centres in the UK by leading battery and EV manufacturers. These centres hold a significant role in regional and global product development and in providing collaboration and market opportunities for scaling businesses. The Government is committed to building a pipeline of technology that will enable the UK to remain competitive and future-proof our manufacturing industry. H) The Government will work with key public finance institutions to review their offering across advanced manufacturing sectors, with a view to identifying any potential gaps and opportunities for further interventions. The Department for Business and Trade will issue a Call for Evidence and establish an industry forum on access to finance for manufacturers. This will draw on evidence from the UK’s public financial institutions – the BBB, UKIB, and UKEF. We will assess how novel financial instruments could potentially be tested, adopted, and offered over suitably long periods where existing ones cannot satisfy demand.