Chancellor revs up driverless car industry with £400m charging investment

Connected and Autonomous Vehicle trials

With predictions the UK driverless car industry will be worth £28bn to the UK economy and employ 27,000 people, it was not surprising to see the Chancellor focus on this sector.

To support the transition to zero emission vehicles, the government will regulate to support the wider roll-out of an electric vehicle charging infrastructure.

It will invest £200m and this will be matched by private investment into a new £400m Charging Investment Infrastructure Fund.

It will also commit to electrify 25% of cars in central government department fleets by 2022. The government will also provide £100m to guarantee continuation of the Plug-In Car Grant to 2020 to help consumers with the cost of purchasing a new battery electric vehicle.

The government wants to see fully self-driving cars, without a human operator, on UK roads by 2021.

The Chancellor outlined how the government would regulate for this, such as setting out how driverless cars can be tested without a human safety operator.

The National Infrastructure Commission (NIC) will also launch a new innovation prize to determine how future roadbuilding should adapt to support self-driving cars.

The government will invest a further £160m from the National Productivity Investment Fund (NPIF) in new 5G infrastructure.

The first projects to benefit are:
•    £10m to create facilities where the security of 5G networks can be tested and proven, working with the National Cyber Security Centre
•    £5m for an initial trial, starting in 2018, to test 5G applications and deployment on roads, including helping to test how to maximise future productivity benefits from self-driving cars, building on the work already taking place on Connected and Autonomous Vehicle trials in the West Midlands.

“There is perhaps no technology as symbolic of the revolution gathering pace around us as driverless vehicles,” said Mr Hammond.

“Our future vehicles will be driverless, but they’ll be electric first – and that’s a change that needs to come as soon as possible.

“So, we’ll establish a new £400m charging infrastructure fund, invest an extra £100m in Plug-In-Car Grant, and £40m in charging R&D.”

The law will also be clarified so that people who charge their electric vehicles at work will not face a benefit-in-kind charge from next year.

Justin Benson, head of automotive at KPMG, commented: “With the tax on diesel cars and some of the Chancellor’s proposals on electric vehicles (EV), the Government clearly wants to encourage consumers to buy more environmentally friendly vehicles. However, while EV grants go some way to making it easier to sell electric vehicles, the elephant in the room is the cost of batteries: this remains the largest single cost of new EVs. It would therefore be good to see more help for low emission technologies, such as enhancing R&D tax credits for battery and hydrogen delivery technology.

“From April 2018 any cars that don’t meet EURO6 standards will be subject to the higher tax bands, so most cars made pre-2015 will be affected. Recent reports confirm that new and used diesel cars have been reducing in price. Although this change may encourage some consumers to purchase new lower emission cars, it will mean further downward pressure on new and used diesel car prices, thereby reducing future investment in an industry already suffering from significantly reduced levels of investment due to uncertainty over Brexit.”