Unlock automotive innovation to turn British ideas into jobs, industry urges

• Four in five automotive businesses more likely to invest in UK RD&I and commercialisation with stronger government support and lower costs, new research shows.
• UK already a global hotbed for auto RD&I with £5.3bn invested annually – and zero emission and self-driving vehicle rollout offering fresh opportunities.
• Scaling up to commercial production named biggest growth barrier, with targeted support and energy reform needed to unlock investment and job

Britain could turn its automotive innovation strengths into fresh investment, high value jobs and growth with targeted government support and lower business costs, according to a new report published today by the Society of Motor Manufacturers and Traders (SMMT).¹ Four in five (83.9%) automotive businesses surveyed would be more likely to begin or expand UK research, development and innovation (RD&I) investment over the next five years – with four in 10 (38.7%) significantly more likely – under these conditions.²

The report, Turning Automotive Innovation into UK Investment, highlights substantial untapped growth potential in a sector already investing £5.3 billion annually in the UK. From EV batteries and motors to lightweight materials, self-driving software, AI and cybersecurity, automotive innovation offers opportunities to develop British products and services for customers around the world.

The UK starts from a position of strength. Nearly three quarters (74.2%) of respondents identified its talent pool as a key advantage for UK-based automotive RD&I, alongside government funding support (52.5%) and collaboration with world-class universities (58.0%).³ These capabilities provide a strong foundation to develop new technologies shaping cleaner, safer and more connected mobility.

Crucially, the opportunity now extends beyond research and development. By supporting the UK’s flourishing auto RD&I sector to grow in Britain and bring new products to market, significant commercial value would be retained – securing new production opportunities, stronger supply chains and skilled jobs nationwide. With four in five of the UK’s 24 auto R&D centres operating in industrial hubs outside of London and the South East,⁴ growth is also likely to extend across the country.

Realising this opportunity, however, requires making the UK a globally competitive location, not just for developing business ideas, but also for commercialising them. Given respondents identified the difficulty of scaling their new tech from the ‘lab’ to commercial production in the UK as the biggest barrier to growth,⁵ a stronger route to market is needed – else Britain risks seeing new tech developed here generating investment and economic benefits elsewhere.

Ahead of the UK’s 10 Year Plan due for next year’s Spending Review,⁶ SMMT is urging government to prioritise a targeted, multi-year pathway to support early-stage auto RD&I into its next phase of growth – demonstration, pilot manufacturing and scale-up – expanding the sector’s existing investment. Lower industrial energy costs and faster grid infrastructure delivery would further enhance the UK’s proposition, particularly for energy-intensive advanced manufacturing – transforming the country’s natural innovation strengths into commercial value, industrialisation and skilled jobs fit for the future.

Notes to editors

1. SMMT, Turning Automotive Innovation into UK Investment.
2. The report is based on a survey of 31 SMMT members specialising in automotive RD&I – including six high-volume vehicle OEMs, 14 advanced components and propulsion technology suppliers, seven software and services providers, and four luxury, performance or low-volume vehicle makers.
3. Percentages may not sum to 100% because due to the survey’s multi-select question design.
4. Turning Automotive Innovation into UK Investment, page 4.
5. Turning Automotive Innovation into UK Investment, graph 10, pg10.
6. Budget 2026, www.gov.uk/government/publications/budget-2026-document.

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