THE SOCIETY OF MOTOR MANUFACTURERS AND TRADERS LIMITED SMMT, the ‘S’ symbol and the ‘Driving the motor industry’ brandline are trademarks of SMMT Ltd

LOW CARBON VEHICLES

Konstanze Scharring, Director of Policy, SMMT

Workshop - ‘Green Technology: Do we risk falling behind?’TUC Climate Change Conference, 21 October 2013

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THE UK AUTOMOTIVE SECTOR• UK automotive industry produces 1.5 million vehicles and over

2 million engines annually

• Automotive is vital to the UK economy – Around £55 billion turnover – Over 700,000 jobs dependent on automotive– Over 80 % of UK produced cars are exported– Invests £1.3 billion in R&D each year– £8bn investment committed to UK since 2010

• UK is home to 7 volume car manufacturers, 8 commercial vehicle, 11 bus & coach, more than 10 major premium & sports vehicle manufacturers and over 2,350 component manufacturers

• UK is 2nd largest new car market in Europe (ca. 2.1m) & only major growth market in EU

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BUILDING A LOW CARBON FUTURE

Expansion of TATA European Technical Centre, Warwickshire

£725m investment for LEAF, Invitation & battery plant, Sunderland

MIRA £250m facility expansion, Nuneaton

Toyota creates first car plant solar array, Burnaston

£505m low emissions engine plant, Wolverhampton

£24m investment to produce fuel-efficient engines, Bridgend

BMW to build engines for its i8 plug-in hybrid sport car, Hams Hall

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GLOBAL REGULATORY DRIVE ON NEW CAR CO2

Source: ICCT 2013

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UK NEW CAR CO2 EMISSIONS

UK actual new car CO2 emissions to 2012 and EU targets for 2015 and 2020

• Average new car: 133.1g/km in 2012, -3.6% on ‘11 -26.5% on ‘00

• Step change performance since 2008

• Challenge ahead to achieve pan-EU target of 95g/km by 2020

2000-2007 trend extrapolation

130g/km by 2015

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• 55.0% of the market below 130g/km and 8.2% below 100g/km, compared with 0.9% and 0% in 2000

• Significant progress, but challenges ahead

DRIVING SHIFT TO LOWER CARBON OPTIONS

Source: SMMT CO2 report (2013)

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GROWING THE EV MARKET• Plug-in Car Grant (PiCG) eligible registrations market share

more than doubled in 2012 to 0.11% • 3,633 PiCGs and 264 Plug-in Van Grants (PiVGs) issued by

March 2013

2011 2012

Source: SMMT data

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• By 2014, 8/9 car segments will have a plug-in model

GROWING CONSUMER CHOICE

Broad range of models available and coming to market

Nissan LEAFVauxhall AmperaToyota Prius Plug-in HybridBMW i3Mitsubishi Outlander PHEVPorsche 918 Spyder

* Anticipated number of EV car modelsSource: SMMT data

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LOW CARBON NOT LIMITED TO CARS

• Government supports deployment of low carbon technology across vehicle types:– Plug-in Van Grant – 25% off purchase price up to £8,000

– TSB £11.6m Low Carbon Truck Demonstration Trial (2012)

– Green Bus Fund Round 4 announced December 2012 brings total fund spend to £95m – majority manufactured in the UK

• Low carbon has value across different vehicle types:

Optare Versa EV– Electric powered - low running costs

– Low vibration - comfortable ride

– Three moving parts - low maintenance

Optare Versa EV wins 2013 SMMT Award for Innovation

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STRATEGIC PARTNERSHIP - AUTOMOTIVE COUNCIL

Automotive Council• Strategic industry-government partnership since 2009• Vince Cable MP & Richard Parry-Jones CBE, co-chairs• Top level leadership by automotive and government• Full Council, Technology Group & Supply Chain Group

www.automotivecouncil.co.uk

Priorities• Improving the attractiveness of the UK as a place to invest• Strengthening the UK supply chain• Increasing investment in R&D, esp. low carbon technologies• Improving the image of the UK automotive sector

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THE INDUSTRY TECHNOLOGY ROAD MAP

Portfolio approach - passenger cars

Source: Automotive Council

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Internal Combustion

Engines

Energy Storage and Energy Mgt

Intelligent Mobility

Lightweight Vehicle and Powertrain Structures

Electric Machines and Power Electronics

Strategic Technologies for UK Auto

Industry

AUTOMOTIVE COUNCIL - 5 STRATEGIC TECHNOLOGIES

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FURTHER INDUSTRY AND GOVERNMENT COLLABORATION ENABLING TECHNOLOGY DEVELOPMENT• UKH2Mobility is a collaborative project between industry and government to develop a consensus vision for the roll out of hydrogen in the UK• Phase 1 key findings (April 2013):

– CO2 emissions can be 75% lower for FCEVs than conventional diesel vehicles

– FCEVs will be at least cost competitive with conventional vehicles

– 1.6m FCEVs could be on the road by 2030

– The UK would need 1,150 hydrogen refuelling stations to meet potential consumer demand

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AUTOMOTIVE SECTOR STRATEGY – JULY 2013

•Four key strategy themes:1. Technology2. Supply chain3. Business environment4. Skills

•Key recommendations:– Advanced Propulsion Centre (APC) - Industrialisation of UK technology in

collaborative pre-competitive projects, £1bn for 10 years match-funded– Motoring taxation & ULEV strategy – Long term approach to tax & incentives

to 2020, £500m OLEV funding till 2020– Industrial Partnership for skills - Industry framework to create

comprehensive talent pipeline– Automotive Investment Organisation (AIO) - New body to attract target list of

key Tier 1 investors & secure existing OEM investment– Tooling Finance - Framework agreement with BBA on access to tooling

finance for suppliers via high street banks– Supply chain competitiveness programme: AMSCI bid £40 million, long

term competitiveness improvement across UK supply chain, match-funded

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‘DRIVING THE FUTURE TODAY’

OLEV strategy – September 2013

Keeping the existing plug-in vehicle grants until at least May 2015

Launching a call for evidence to inform the £500m 2015-2020 package of support

Jointly developing a consumer communications campaign with industry

Working with industry on an initial network of circa 65 hydrogen refuelling stations

Maintaining a strong, clear and lasting set of tax incentives for the purchase of ULEVs

Clarifying the tax position for ULEVs with HMRC

Source: OLEV

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COMMITMENT & COLLABORATION IN UK

• £400m OLEV support to 2015: Vehicle, Infrastructure, R&D

• £500m for Advanced Propulsion Centre + £500m from industry

• £500m OLEV support to 2020

• Fiscal incentives to 2020

• H2 UK Mobility – Phase 2 report due (www.ukh2mobility.co.uk)

• ‘Go Ultra Low’ - Joint Ultra Low Carbon Communication Campaign in 2014

Society of Motor Manufacturers and Traders Limited71 Great Peter Street, London SW1P 2BNwww.smmt.co.uk

THE SOCIETY OF MOTOR MANUFACTURERS AND TRADERS LIMITED

Thank you