Economy Car in Uk

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Department for Transport

Department for Business, Enterprise and Regulatory Reform

Department for Innovation, Universities and Skills

UltraLow CarbonVehicles in the UK


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The internal combustion engine hasdominated road transport over the pastcentury. The automotive sector now aceshuge changes: an oil crisis last year, a nancialcrisis this year and a climate change crisis ormany years ahead. It is clear that there is anenvironmental and an economic imperativeto do things dierently.

The automotive industry

is a pivotal part o the UK

manuacturing sector,

adding value o 9.5bn to

the UK economy and directly

employing around 180,000

people.

The automotive industry is a pivotal part othe UK manuacturing sector, adding valueo 9.5bn to the UK economy and directlyemploying around 180,000 people1.

This includes around 74,000 people in vehicleand engine manuacturing, and 106,000people in the automotive supply chain.

In addition, it is estimated that a urther

200,000 people are employed in the supplychain in metal orming, plastics manuactureand other manuacturing industries. We needto ensure that this strength is translated intoglobal leadership in the development andmanuacture o ultra-low carbon automotivetechnology such as hydrogen powered,plug-in hybrid and ully electric vehicles.

This is a big challenge or government. Itmust send the right signals and provide theright rameworks or business. And it mustsupply the necessary support to industry andworkers to ensure that the market in the UK

UltraLow Carbon Vehicles in the UKThe challenge

Our transport system connects people to places and businesses to

markets. As such it is undamental to our economic strength and

quality o lie. However, the only sustainable uture or transport

lies in a transormative shit to low carbon. Our ambition must be

twoold, to reduce the environmental impact o transport and or

UK business to beneft rom this transormation.

UltraLow Carbon Vehicles in the UK 1

1 ONS ABI 2007 data, Published November 2008


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shits rapidly and decisively to low carbon.The UK is committed to such a transition andwill continue to press or a clear long-termregulatory ramework at the European level,

building on the recently agreed New Car CO2regulation, to maintain the momentum or atransormation o the industry (see Box 1).

Box 1: EU Regulation on New Car CO2

Regulation can play a critical role inthe transition to low carbon vehicles byestablishing a clear, long term rameworkor action by industry.

The Government has supported the EUsNew Cars CO

2Regulation, helping to

negotiate a solution which will stimulateinnovation across all segments o carproduction, large and small, and whichrespects the diversity and competitivenesso the industry and markets across Europe.

A stretching target o 130g/km CO2

by2015 and 95g/km by 2020 has been setwhich provides a clear and accelerating

trajectory or the deployment o lowcarbon vehicles and adaptation o newultra-low carbon technologies. This enablesindustry to make strategic planningdecisions and investments or the uture.

The winners will be those companies whichrespond most eectively with a rapidevolution o new and attractive low andultra-low carbon products.

Maximising the benets o the transition toultra-low carbon vehicles is a prime exampleo what a more active public policy orequipping UK businesses and workers or a

changing global economy means in practice.It involves the public sector acting together tocreate and urther economic opportunities orthe private sector, while meeting the needs osociety as a whole.

An industry renewed

The transition to a low carbon world willtransorm our whole economy. Lord Sternslandmark Review in 2006 set out the economic

case or action on climate change and orinvestment in a low carbon economy.

Recognising this imperative, through theClimate Change Act the UK has become therst country in the world to adopt a legallybinding target to reduce carbon emissions by at least 26% by 2020 and 80% by 2050.The UK is taking a global lead by settingCarbon Budgets which will sit along side thenancial Budget. Transport will be part o this,with emissions rom road vehicles accountingor 19% o the UKs domestic CO

2.

This level o change brings with it opportunity.

In recent years, both the Committee onClimate Change and the King Review o LowCarbon Cars have suggested that a signicantdecarbonisation o road transport is possible.A wide range o solutions are required (orexample through introduction o sustainablebiouels and changes in patterns o mobility),

and improvements to existing vehicletechnology have a critical role to play.

19%o the UKs domestic CO

2emissions come

rom road vehicles


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To achieve this, the way we build and powercars needs to change. In the short term weneed improvements to existing technologies continued advances in the eciency o

internal combustion engines, or examplethrough improved uel injection systems, lightweighting or drag reduction. To achieve thelonger-term cuts in carbon emissions, we needthe new, cleaner technology that is only nowemerging or almost within reach.

We are also acting to decarbonise ourelectricitiy generation to maximise thepotential or CO

2reduction rom electric

and plug-in hybrid vehicles. While electrically

powered vehicles will increase demand orpower, through smart management o ournetworks we can minimise the need or newpower stations and maximise the benetsthese vehicles can bring in the creation oa greener grid. Our early demonstrations oelectric vehicles will involve some o the UKsleading power companies so that we canlearn how best to manage this transition.

By acting now there is real

potential or the UK to take a

lead in this sector.

By acting now there is real potential or theUK to take a lead in this sector. While thereis a great deal o investment globally in low

carbon technologies such as hybrid cars, themarket or the next generation o ultra-lowcarbon cars remains wide open. I UK rms andworkers can adapt to the shit in production to

CASE STUDY: Ford ECOnetic engine -

designed and built in the UK

Developed by Fordat the UKs DuntonResearch andEngineering Centreand now in productionat the wind-poweredDagenham Diesel

Engine Centre in Essex, the range oDuratorq TDCi turbo diesel enginesare providing aordable technologysolutions or everyday driving. These high

technology diesel engines power the mostuel ecient versions o the Ford Fiesta,the Ford Focus and the Ford Mondeoand are the result o a 130m investmentprogramme. ECOnetic brings leading-edge green technology to mass marketapplications. The powertrain combines withother developments such as optimisedrolling resistance tyres, low riction oil,enhanced aerodynamics and a greenshit indicator light to deliver best in classCO

2perormance the Fiesta 1.6l variant

achieves 98g CO2/km whilst the Focus 1.6l

achieves 115g CO2/km. Ford intends to

extend the ECOnetic brand across its ullrange o vehicles.

ultra-low carbon vehicles, the potential marketin the UK and abroad is huge.

The UK automotive industry has reached aconsensus as to how this opportunity can

be seized and the challenges answered. Thisco-operation has been ostered through theNew Automotive Innovation and Growth Team(NAIGT), which will publish its report in the



coming weeks. In planning or a low carbonuture they have agreed a technologicalroadmap rom now to 2050 (see Box 3). TheNAIGT will also recommend that government

takes ownership and works with the industry toprovide strategic direction or the development,production and use o vehicles in the UK.

As a Government we accept there is a role tobe played and have made this a core priority.We have already committed around 400million o support to encourage developmentand uptake o ultra-low carbon vehicles.Further, the 2.3bn package o support or theautomotive sector in the downturn has been

tailored to support its long-term uture as aworld leading low carbon industry.

We have already committed

around 400 million o support

to encourage development

and uptake o ultra-low carbon

vehicles.

This document sets out how we will coordinatepublic sector activity and work with industryand academia to:

Build on the R&D activities o the automotiveindustry to make the UK a leading placein the world to develop, demonstrate andmanuacture ultra-low carbon vehicles.

Accelerate market penetration o ultra-lowcarbon cars which will contribute materially

to the overall national target on emissionsor greenhouse gases and air pollutants.

Maximise the beneft to UK operating frms

and supply chains o this acceleratedmarket penetration and continue to attractinward investment or the development andproduction o ultra-low carbon vehicles.

Industry, Government and the regions workingtogether can enable the UK to become aworld leader in low carbon transport, at theoreront o the development, demonstration,manuacture and use o ultra-low carbonautomotive technology.

While there is a clear recognition thattechnology will continue to evolve, it is alsoclear that we must ensure that prohibitivecosts or a lack o supporting inrastructuredo not hold back companies and individualsrom making ultra-low carbon cars a part oeveryday lie.

Box 2: The shit to low carbon vehicles

Short term (next 5 years)

Incremental improvements to eciencyo new cars.

Increased take-up o new modelhybrids.

Interested cities and regions developingelectric vehicle charging inrastructuresolutions to provide a core o electric

car cities.

Gradual emergence o early marketultra-low carbon vehicles.



It may take some years beore we see ultra-low carbon cars being used on a large scalebut automotive rms are deciding now whereto locate their production and are looking or

clear government leadership and a potentiallystrong domestic market. Now is the right timeor us to take bold action.

Medium term (510 Years)

Continued improvements to eciencyo new cars.

Continued take-up o new modelhybrids.

Increased coverage o electric vehiclecharging inrastructure enabling wideruse o ultra-low carbon vehicles.

Ultra-low carbon vehicles enter largescale production.

Longer term (10 Years +)

Combinations o hybrid vehicles,

downsized powertrains, and lightweightvehicles become dominant.

Continued rollout o charginginrastructure.

Mass market development o ultra-lowcarbon vehicles leading to signicantmarket penetration.

Ultralow carbon vehiclesin the UK

Our strategy or making the shit to ultra-lowcarbon vehicles in the UK is based on vegoals. These recognise the vital way in whichsupply and demand or ultra-low carbonvehicles will have to interact in the nextew critical years. Government will activelyencourage consumer uptake o ultra-lowcarbon solutions, their development andmanuacture here in the UK by:

Supporting the automotive industry throughthe downturn or a successul transition to a

low carbon uture.

Securing the uture competitiveness o theUK industry by enhancing its reputation as aleading location or research, developmentand demonstration o ultra-low carbonvehicle technology.

Creating a viable environment to supportthe adoption o ultra-low carbon vehiclesin lead cities and regions, including

investment in the skills base.

Making ultra-low carbon vehicle solutionscompetitive or consumers by helping toreduce the upront costs o these vehicles.

Clear and strategic leadership byGovernment and a smarter coordinationo public sector activity.

Supporting the automotive

industry through the downturn

The automotive industry has been hitquickest and hardest o all UK manuacturing



sectors by plummeting domestic and globaldemand. The economic crisis is orcingcar manuacturers around the world torestructure and consolidate. Even beore the

fnancial crisis, the UKs ability to competeon a cost per unit basis in the automotivesector has been eroded by rising skills basesand improving inrastructure in many o theemerging economies. UK companies mustshit rom competing on a purely cost basis, tocompeting on a cost and innovation basis andplaying to the strengths o our innovative anddynamic automotive sector.

This combination o actors accelerates the

need or a transormation o the automotiveindustries in the UK and elsewhere. Only byredirecting toward a low carbon oundationand creating a stable investment rameworkto encourage long-term investment in the UKcan there be a viable uture or the sector.

The UK Government will assist the industry toaccess support or this transormation rom allavailable sources. We helped secure the 4bnannual budget or the European InvestmentBanks (EIB) new clean transport acility which

is particularly targeting the automotive sector,and are supporting UK automotive companiesin accessing EIB loans. Nissan and Jaguar LandRover have already received EIB approval inprinciple or loans worth more than 500m.

The 2.3bn Automotive Assistance Programme(AAP) opened or business on 27 Februaryater receiving State-Aid clearance andGovernment continues to promote thisprogramme to core automotive businesses.

Over 50 companies have since asked orurther inormation on the programme with anumber providing ull expressions o interest.

The aim o the AAP is to support automotivecompanies in the continued delivery oinvestment that will create or sustain jobs,develop cutting edge technology, bring

special economic value, maintain R&D inthe UK automotive industry and support thedevelopment o green technologies to developsolutions or carbon reduction, all o which haveto oer value or money to the taxpayer.

Alongside the launch o the AAP theGovernment announced that a urther 35mo Train to Gain support would be availablethrough the Semta sector compact to meetthe automotive industrys specifc skills needs.

This is an opportunity to reposition the UKworkorce at the leading edge o rapidlydeveloping technology.

The Government is investing in science,technology, engineering and maths (STEM)subjects within our universities to provide thehigher level skills that the industry needs in theuture. The Higher Education Funding Councilor England (HEFCE) have undertaken a250m programme to support subjects thatare strategically important and vulnerable,

and this includes STEM subjects. Furthermore,recognising the cost o science subjects,rom 2007/8, 100m will be invested over ouryears to maintain provision in science subjectsincluding physics and engineering.

The next generation o researchers andengineers will have the skills to continuethe transition to low carbon through theResearch Councils support or doctoraltraining. Since December the Engineering and

Physical Sciences Research Council (EPSRC)has announced over 290m in awards orDoctoral Training Centres and other training,a proportion o which will support sustainabletransport objectives.

The2.3bnAutomotive Assistance Programme

opened or business on

27 February 2009



When we publish our Low Carbon IndustrialStrategy this summer we will set out the wideractions we will take across the skills system tosupport innovation in lead cities and regions

and deliver a successul transition to a lowcarbon economy.

Making the UK a world leaderin research, development anddemonstration of ultra-lowcarbon vehicles

There are still huge technological challengesto meet in the transition to low and ultra-

low carbon vehicles. The UKs automotivesector has a global reputation or researchand development, design engineering andmanuacturing2.

We can also draw on a world-class scienceand research base and a superb reputationor innovation. Weve already established twoindependent centres o excellence in the areaso low carbon technologies/uel cells (CENEX)and Intelligent Transport Systems (innovITS).

Furthermore, the Technology Strategy BoardsLow Carbon Vehicles Innovation Platorm,worth over 120m, brings together unding romthe Technology Strategy Board, Departmentor Transport, Advantage West Midlands, OneNorth East and the EPSRC, with a view to:

Accelerating industry investment in lowcarbon vehicle commercialisation.

Building new partnerships to address

technical challenges including between

2 Investigation into the Scope or the Transport Sector to Switch to

Electric Vehicles and Plug-in Hybrid Vehicles, CENEX, Arup, October 2008

CASE STUDY: Zytek globally leading,

innovative SME

Zytek is now one othe ew companiesworldwide producingelectric vehiclepowertrains, and theonly one manuacturingvehicles (the Smart

Fortwo ED) or a major car manuacturer,Mercedes Benz. The Zytek electric engineis a complex assembly o many hightechnology products tightly packaged

into a single unit. This technology is alsobeing applied into Motorsport Zytek isdeveloping a hybrid electric drive or aleading Formula One team that has alreadyrun competitively in the 2009 season.

academia, innovative SMEs, mid sizecompanies and large original equipmentmanuacturers, to address technicalchallenges.

Increasing the UK-sourced products oeredto the market as a result o that research,development and demonstration (R, D & D)investment and the introduction o new UKparticipants in the supply chain, and

Delivering benet to UK Gross Value Added(GVA) and to the UKs contribution to theachievement o national and internationalCO

2emissions reduction targets.



Projects to be unded within the TechnologyStrategy Boards recent 10m competition,under this platorm, or the development oenabling system and sub-system technologieswill seek to deliver more ecient, cost eectiveultra-low carbon vehicles or mass marketapplications. Some o the technologiesdeveloped or electric and plug-in hybrid carscould also lter through to conventional cars.

A urther R&D competition under theInnovation Platorm will open in June, toreinorce the development o the supply chainor these new vehicles. This will build on theenabling system and sub-system technologiescompetition, which demonstrated the breadthand capability o UK companies, but have awider remit and will build up the capabilitieso companies o all size in this area.

We are signalling the strength o our intentby ensuring that there are ground-breakingnumbers o ultra-low carbon demonstrator carson the road in the UK. To do this Governmentwill capitalise on the immediate opportunitiesor supporting research, development anddemonstration through the:

Immediate scaling up o the TechnologyStrategy Boards ultra-low carbon vehicledemonstration competition, more thandoubling the planned 100 vehicles, mosto which will be on the road within thenext 18 months. This will put the UK atthe global oreront, with internationallyleading numbers o ultra-low carbon

vehicles on UK roads, driven by realconsumers. This competition has provedhighly successul and the scaling up othe number o demonstrator vehicles isa direct result o the number and qualityo the bids received. The competitionhas demonstrated the depth and levelo expertise in the UK and has attractedsignicant international interest.

Showing public sector leadership inour procurement decisions to helpdemonstrate the potential o electric andlow carbon vehicles, or example throughthe DTs 20 million Low Carbon VehicleProcurement Programme, which currentlyocuses on vans. We plan to announce thewinning companies in May.

Creating a viable environmentto support the adoption ofalternatively fuelled ultra-lowcarbon vehicles in lead citiesand regions

Beyond demonstration, there are considerablechallenges that will have to be met beorethe scale o deployment o ultra-low carbonvehicles on the UKs roads can increase

dramatically. Key to these is the need to ensurethat the initial inrastructure that is requiredto make ultra-low carbon vehicles viable isin place. This will allow economies o scale toreduce the costs o new technologies.

Up to20Mto support the development o

lead cities and regions, bringing

together consortia o cities and

companies to start the processes

o building inrastructure

Internationally leading numbers o ultra-low carbon vehicles on

UK roads, driven by real consumers.



As part o doing this Government is committedto supporting the development o lead citiesand regions, bringing together consortia ocities and companies to start the processeso building inrastructure and increasing

consumer condence, thus growing themarket or ultra-low carbon cars. This will takethe number o ultra-low carbon vehicles onthe roads rom the hundreds to the thousands.

To support those who are ready to meetthis challenge we will provide access toseed money worth up to a total o 20m tothose consortia committed to establishingthemselves at the heart o this marketin the UK.

The aim is to ensure the development o anetwork o electric vehicle inrastructure

Reduce the price of electric and plug-in hybrid

cars by around

20005000for consumers

CASE STUDY: Elektromotive electric

vehicle charging stations

Elektromotive is a UK based companyounded fve years ago that specialisesin the research, design and manuactureo electric vehicle charging stations.Its Elektrobay recharging station hasbeen successully trialled in London byWestminster City Council since December2006. By the end o May 2009 Elektromotivewill have 100 charging stations operatingin London and a urther 68 around theUK. Elektromotive also have Elektrobays

operating in Sweden, Holland andGermany and are working on projects inIreland, Spain and the Middle East. Theirnew 3 Phase Dual Elektrobay is due to belaunched in May 2009.

across the UK that will lead to the linking ocities and regions. Central government willtake an overall lead in the development othis programme, drawing on the work o the

Energy Technologies Institute and pioneeringlocal authorities, like the City o Westminster,in this area. Although government has a rolein helping support the minimum inrastructureto make the transition to ultra-low carbonvehicles viable, we expect that the privatesector, either in the orm o electricity suppliersand distributors or other third parties, willultimately take the lead in inrastructureprovision.

Making ultra-low carbonvehicle solutions competitivefor consumers

Consumers have not yet had the opportunityto see many ultra-low carbon cars on theroads. Mass market electric and plug-inhybrid cars are not yet available in signicantnumbers and the rst o these to market willbe more expensive than their conventionalcounterparts.

The majority o the 250m recentlyannounced by the DT will be used tocreate a scheme to reduce the price oelectric and plug-in hybrid cars by around2000-5000.We will begin discussions withthe automotive and nance industries onhow this reduction can best be deliveredand coupled with the existing benets orlow emissions cars, such as exemptions romVehicle Excise Duty. We aim to make these

cars an attractive choice or consumers.

Eligible cars will need to meet strict saetystandards, not exceed a maximum CO

2



ceiling and be designed or the massmarket. We will work closely with our keystakeholders in the coming months toagree the parameters o the scheme and

the appropriate delivery mechanism. Thescheme is likely to be operational in 2011and more details will be announced laterin the year.

Clear and strategic leadership andcoordination across Governmentand beyond Whitehall

The development o a strong ultra-low

carbon vehicle market in the UK will requirea coordinated and strategic ocus toGovernment activity. This ast paced agendacuts across departmental responsibilities andactivities and through all levels o government.

This revolution in road transport envisioned byGovernment and others will require new wayso working together. The NAIGT have agreed aresearch and development roadmap to 2050which i met would provide the technologies

or this vision, recognising the need or fexibilityas innovations come to market (see Box 3).

Over this period government, cities, utilities,the automotive industry, consumers andinrastructure providers will need to worktogether to increase the number o ultra-lowcarbon vehicles on our roads.

CASE STUDY: International Conerence

o Electric Vehicle Experts

Last October the UKhosted an internationalmeeting o expertson low carbon cars toexplore the challengeo bringing electriccars to market.

Some 140 delegates rom more than 15countries representing government, industry,the automotive research community andacademia attended. This event has rmly

established the UK as a leading player inthe work on low carbon cars.

As this collaborative activity intensies, globalsuppliers and manuacturers will be drawnto the UK as the leading location to trialand develop vehicles and technologies. Thispoint o critical mass will establish Test bedUK, the NAIGTs concept o how the UK cannurture a dynamic and growing ultra-lowcarbon automotive industry in a competitiveglobal market.

Delivery is key. Business has said clearly that weneed to be better at providing a co-ordinatedand strategic ocus to Government activityand this is one o the recommendations o theNAIGT report. We have heard this messageand taken it seriously. The Low CarbonIndustrial Strategy will respond with an answerin the summer.



Box 3: High-level technology roadmap or the UKs decarbonisation o road transport

130 95 ?EU Fleet Average CO2

Targets (g/km)

Niche EVs Mass Market EV Technology

Demonstrators Fuel Cell Vehicle

Full Hybrid

Micro/Mild Hybrid

IC Engine and Transmission innovations (gasoline/diesel/renewables)

Vehicle Weight and Drag Reduction

Fuel Cell Stack & H2

storage Breakthrough

Charging Infrastructure Energy Storage Breakthrough

Energy Storage Breakthrough

H2

Infrastructure

Plug-In Hybrid

2000 2010 2020 2030 2040 2050

Demonstrators

The future

The Governments aim is or the UK to be aworld-leader in ultra-low carbon vehicles. Wewill do this by backing industry to develop thebest technological solutions, and cities andregions to partner industry in creating the initialinrastructure that will make them viable. It willalso help consumers make the choice to makethe transition to green transport.

Our demonstration projects will put hundredso ultra-low carbon vehicles on the UKs

roads over the next year. We expect vehiclesnumbers to rise to the thousands in the earlypart o the next decade, with ultra-low carboncars being a common sight on our roadsby the end o the decade. Over the longerterm these vehicles have the potential toprovide the dominant orm o road passengertransport as we move to a radically lowercarbon transport system.



The next fve years or consumers

2009 and 2010 will see:

The Government put cutting-edgedemonstration cars on the road in acombination o high-prole feets andgeneral usage. These will prove theconcept, and demonstrate the potentialo these cars in real-world settings.

2010 to 2012 will see:

A small number o urban centresemerging as the UKs electric car cities.

Help rom government that will makeultra-low carbon cars cheaper by in theregion o 2000 - 5000 per vehicle.

2012 onwards will see:

Electric and plug-in hybrid cars willbecome increasingly common in theUKs electric car cities and will beginappearing elsewhere. These cars will be

easy and un to drive. Reuelling themand paying to reuel them will becomean increasingly straightorward part o lieor their drivers.

The next fve years or industry

2009 and 2010 will see:

Publication o the complete NAIGTanalysis on how the UK will position itsel

to attract investment in or researchand manuacturing o ultra-low carbonvehicles.

Government showing leadership bycommitting to incentives or low carbontransport.

Government creating an extensivedemonstration network in the UK andexpanding it to make the UK the mostvisible place on the map or trials o ultra-low carbon prototypes.

2010 to 2012 will see

The UK established as an attractivelocation or investment through a

structured approach to demonstrationand R&D.

The emergence o locations in the UK ornew markets.

Consumer incentives in place tostimulate demand.

Industry bringing models to market,moving to mass production, and loweringthe costs o core technologies such asbatteries.

2012 onwards will see:

Critical mass in selected locationsdeveloped rom coordinated action othe automotive industry, inrastructureand energy providers and cities.

Better understanding o the businessmodels that work here in the UK.


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www.hmg.gov.uk/lowcarbon

Department for TransportDepartment for Business, Enterprise and Regulatory ReformDepartment for Innovation, Universities and SkillsFirst published April 2009. Crown copyright. URN 09/917

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