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Low Carbon Vehicle event 2009

Lord Drayson of Kensington,  Minister for Science and Innovation
Millbrook,  09 September 2009

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Good morning.

As you may know, I’m rather keen on cars. It goes back to my boyhood growing up near Brands Hatch, and it has stayed with me throughout my life. It got me my first job at British Leyland as a sponsored engineer in 1978 ,and fuelled my passion for motor sport, which took me racing at Le Mans in the 24-hour race this June.

I tend not to count the race and road cars that I own, so as not to alarm my wife – but it’s certainly into double figures and includes some of the iconic great British cars of the last 40 years, including the Low Drag E-Type, the DB4GT, the March 712, the Vanquish and Lotus 24, the Mini Cooper (the new one).

I say that to stress to you how much of an enthusiast I am for cars and for the British car industry – and how important I believe it is for our country and for our economic prosperity that we have a successful car industry in the UK.

However, we all know how tough the last 12 months have been since I last came to this very same event.

I believe the global credit crunch, following as it did the spike in oil prices, has cruelly exposed the global overcapacity in the car industry, and accelerated the radical shift that is taking place in consumer attitudes to cars – and low-carbon cars in particular.

Our job, together, here in the UK, is to embrace this new reality and seek out the opportunities that this very difficult environment presents for the renaissance of a British car industry. Because I believe it does present such opportunities, and the very fact that this audience is so much bigger this year than last shows that you do too.

We have seen a hollowing out of our industry over past decades as much of the automotive R&D and major supply chains of the industry have gone offshore – and we have an industry that does lots of final assembly but not enough of the high added value, top-tier original equipment manufacturing.

The switch to low-carbon is our opportunity in the UK to use the tremendous expertise we still have in our automotive science and engineering base, and team it up with other expertise from clean-tech, defence and motorsport to create, here in Britain, the next generation of low-carbon cars that global consumers are desperate to buy.

We need radical new approaches that challenge the orthodoxy of vehicle design, manufacture, performance, maintenance and disposal. The complete life cycle. We need to ask difficult questions – and find better answers. Because the pace of change and technological innovation to drive performance with low-carbon impact is pushing hard on the industry

If we in the UK come up with the answers faster than the competition – and if we implement them with real drive – then we will recapture some of the market share we have lost.

That is our opportunity – and we must grab it.

This Government is right beside you to bring more power to your elbow. Not to bail out the past. But to create and capture the future.

So my message at this second Low Carbon Vehicle event is more focused and more emphatic than my message at the first one last year. Indeed, “focus” has become a theme for me as science minister – in urging the research community and business to actively prepare for an economy in which we concentrate on industries where growth is strongest; where the UK has a realistic prospect of being a global leader; and where we possess real competitive advantage.

In the car industry, I believe that means making a distinction between low-carbon and ultra low-carbon vehicles. That’s the area of greatest technical challenge but, as so often in life, it’s the area of greatest opportunity too. Our priority must be to make the world’s leading ultra-low carbon car industry in the UK.

We need to build on our domestic strengths and know-how in light-weighting, aerodynamics, powertrains, chassis engineering and styling. These are fields of British expertise.

But, we must take a strategic view of where the greatest opportunity lies for the UK, and low-carbon is an area of stiff international competition already.

By contrast, ultra-low carbon is a much more promising area, where our potential to compete with the likes of Japan, Germany, France and the US – California, in particular – is that much greater. Its also an area where our science base and inventiveness can be leveraged to a greater extent.

What’s more, we’re dealing here with a set of challenges on an entirely different scale.

There’s the R&D aspect, of course, necessary to produce plug-in hybrids and all-electric vehicles. The race is on to be early to market with viable cars, and then to build brands with global reach. But let’s face it, electric cars are not new. Recently I saw a collection of low carbon vehicles, some of which were over 100 years old. One, built in 1907, had in-hub electric motors!

Then there’s the critical matter of consumer behaviour.

Let’s be honest – there’s little public appetite for strange looking and poor performing cars, whether they are environmentally friendly or not. People want performance and efficiency.

For this to work, we must present consumers with vehicles that contain the “wow” factor – a full range of vehicle classes, not just underpowered city cars whose handling leaves many people cold. (There can be no cynical manipulation of emissions regs by trying to sell re-branded low-emission city cars packaged alongside high-emission luxury cars to average down emissions across the range.)

We must also offer people elegant systems engineering to shape consumer behaviour. I’m thinking of Oyster cards, which have made travelling around the capital so much easier, and mobile phone services, where customers don’t pay for expensive handsets and aren’t bothered by the complexities of cross-network costs. In fact, given that advanced batteries will be expensive, rental models and a variety of tariff options are likely to come into play. We’ll need to allow consumers to dip into the market and try out these vehicles without significant financial commitments.

That’s just a handful of the problems we need to solve. “Disruptive technology” is an over-used label these days, but when applied to ultra-low carbon electric vehicles, it is entirely appropriate.

I’ve joined you this morning because – self-evidently – these sizeable, interrelated challenges cannot be tackled in an uncoordinated way. There is a clear role for Government here in terms of legislation and subsidies, in creating market certainty for nascent technologies, in building a consensus around long-term goals.

To accelerate this agenda and give it a clear focus and direction the Government is creating the new Office of Low Emission Vehicles, or OLEV. It will bring together all the key Whitehall players – Business, Treasury, Transport, Energy, Local Government – to ensure that we move forward decisively in concert with industry.

We’ve no intention of OLEV being a mere talking shop. It will have a clear programme that encourages demand, supports supply and enables places where people can use these vehicles day to day.

It will have a clear timetable that builds on the successes of the last year. We’ve already allocated around £140 million to the Technology Strategy Board’s “Low Carbon Vehicle Innovation Platform” to help accelerate industry investment and facilitate new partnerships to address technical challenges.

And, back in June, the Technology Strategy Board announced the winners of its £25 million ultra-low carbon vehicles competition. Over the next 18 months more than 340 electric-drive vehicles will be trialled across the UK.

As part of a £250 million scheme to deliver a green motoring transformation, the Government has proposed help worth between £2,000 and £5,000 for private individuals and commercial buyers looking to purchase electric or plug-in hybrid cars when they hit the showrooms – which we expect from 2011 onwards.

We are also using procurement and the purchasing power of the public sector to encourage the development and take up of the latest generation of vehicles.

Through our £20 million Low Carbon Vehicle Procurement Programme. four British companies have been selected to supply all-electric vans to selected public sector organisations within months.

To help make the transition to cleaner, greener motoring we also have to look at how we can support the initial infrastructure needed to make travelling by ultra-low carbon vehicles a real and viable option.

That’s the reason the Government has allocated up to £30 million as seed money to the “Plugged In Places” electric vehicle infrastructure scheme.

I believe that this scheme has the potential to make a real difference and so I’m pleased to announce that it will go live for applications in November, with decisions on the first successful bids expected to be announced in Spring 2010.

I think it makes absolute sense to focus in the short- to mid-term on the electrification of personal transport.

The private car isn’t going away, and our economic growth is inextricably linked to people’s mobility. In big cities, public transport obviously has a major role, but so do taxis and car clubs. And beyond cities, where public transport offers no real “per passenger per kilometre” CO2 reduction versus the private car, we must ultimately replace them with ultra low carbon alternatives.

At the simplest level, then, that’s what OLEV will be working on. If it really delivers, then it will be helping to put the private car at the heart of the ultra low carbon revolution.

But let’s be clear: OLEV’s direction has not been determined from within Government.

It is industry that has set the priorities. Through the New Automotive Innovation and Growth Team, industry has worked with the Government to identify business opportunities and the necessary drivers of change.

Several of the key individuals involved in that process are speaking at this Government-sponsored conference – a conference which is unusual in that the audience is much broader than the car industry alone. The research councils, the Energy Technologies Institute, the Technology Strategy Board and various government departments are here. So are energy companies, local authorities, regional development agencies and others.

I’d like this gathering to become a major fixture in the international automotive calendar. In the meantime, our purpose over these two days is to figure out how – by developing new collaborations and sharing research – the UK can make the transformative shift to ultra low carbon vehicles. A shift by which we go a long way to displacing liquid fossil fuel, improving our energy security and establishing strength in technologies with vast commercial and social potential.

We’re on our way with this. I’ve been lucky enough to test-drive some of the demonstration vehicles. These aren’t poor imitations of petrol cars but examples of high-quality design, engineering and manufacture, including two-seater city cars, SUVs, minivans and sports cars offering bucket loads of torque and fantastic chassis dynamics.

But let me stress, technology is not the biggest challenge we face. The problem – both fascinating and daunting – is to combine innovation and know-how in a whole range of areas to produce a radical new customer experience that can fundamentally change how we get from A to B.

We’re on our way – we just need to speed it up a bit.

Thanks for listening. Now let’s have some questions and comments.