'Global leadership in Ultra Low Carbon cars'

The UK automotive industry is worth £9.5 billion (value added) to the UK economy. It directly employs around 180,000 people and a further 200,000 people in the supply chain. 550,000 more people are employed in the motor retail and service areas. In 2009, it produced over one million vehicles, 77% of which were for export markets and over two million engines, 74% of which were for export. It is a pivotal part of the UK manufacturing sector.

The UK government is promoting research into alternative means of automotive propulsion and is actively encouraging investment in this emerging industry. The shift to a low carbon economy is now a fundamental policy for governments in the Western world and beyond in order to reduce dependence on oil. Not only is the volatility of oil prices highly disruptive, but the long term inexorable rise in price, as oil becomes scarcer and more expensive to produce, has economic and political effects which governments are at pains to avoid.

Emissions awareness is influencing new car purchase intentions

The UK government is also conscious of peoples’ growing awareness of the carbon dioxide emissions from their cars and the effects they have on climate change. Market research by ICM Research in 2008 showed that 42% of drivers surveyed were looking to buy a more environmentally friendly car when they next changed their car. 71% of British motorists would consider driving an electric car to help combat ‘green issues’ and 63% of motorists questioned stated that they have already changed their attitudes towards car usage with increased awareness of green issues. Nearly a third worry about green issues when using their car.

A significant majority, over 80%, of under 25s would contemplate driving an electric car and 66% of over 55s would consider making such a change to their regular car buying decision-making.

Carbon emissions reductions are driving government policies

The UK government is putting in place policies aimed at achieving the general target of a low-carbon economy and the specific target of a low-emissions automotive industry. Through the Climate Change Act, the UK has become the first country in the world to adopt a legally binding target to reduce carbon emissions by at least 26% by 2020 and 80% by 2050. The UK is taking a global lead by setting Carbon Budgets which will sit alongside the Financial Budget.

Package of government measures

In the UK, almost one fifth of the country’s total carbon dioxide emissions come from road vehicles and government policy is increasingly directed towards promoting ‘ultra-low carbon cars’ ie plug-in hybrid cars, all-electric cars and fuel cell cars, with significantly reduced or zero CO2 emissions. In the government’s publication, ‘Ultra-Low Carbon Vehicles in the UK’, April 2009, the government stated that ‘we need to ensure that the automotive industry’s strength is translated into global leadership in the development and manufacture of ultra-low carbon automotive technology such as hydrogen powered, plug-in hybrid and fully electric vehicles’.

The document outlined a comprehensive package of Government measures, worth nearly £400 million, to accelerate the transition to Ultra Low Carbon Vehicles for motorists and the UK automotive sector.