Guest blog: Funding innovation in the automotive sector - through a different lens

I have always been passionate about making a difference. I have spent the last 15 years working in not-for-profit organisations that have supported the UK innovation agenda – across the renewables sector and now, automotive. I have been at the Advanced Propulsion Centre UK (APC) for 8 years and have seen the value of different grant funding interventions, developed with the Department for Business & Trade (DBT) and Innovate UK, to help create a funding ecosystem in response to the challenges we face. Net zero is more than a noble cause. It is essential to help tackle climate change and the real world impacts we are seeing so starkly across the planet. And decarbonising the automotive industry is a big part of that.

But I am not an engineer; I am an accountant. I may look through a different lens but have the same desire to help deliver successful projects that will help achieve the UK’s net zero targets as effectively and efficiently as possible.

But why do we need targeted government intervention?

We are all aware of the valley of death in innovation funding – the importance of derisking investment and accelerating the commercialisation of technology – and the role of government funding to bridge that gap. It also has a wider purpose - including achieving Government’s policy objectives and stimulating economic growth. All these are important for UK and UK PLC.

But one size does not fit all – and funding can be a journey. APC projects are part of an automotive funding ecosystem that has evolved over the last 10 years and have pivoted to meet both the needs of Government and Industry. We have demonstrated this funding is working, and it remains a hugely important part of automotive innovation.

Through APC’s first years it became clear that in addition to R&D investment, capital support was required to anchor and grow future propulsion technologies. Working with DBT APC now facilities the pipeline development and delivery of the Automotive Transformation Fund (ATF), launched in 2020 to transition to an electrified UK automotive industry by supporting strategically important investments in the UK – including gigafactories, power electronics and fuel cells. This is key to the development of the UK’s upstream supply chain with a forecast value of over £24bn.

In 2020 we recognised the challenges of the pandemic on delivering large scale CR&D projects and launched the Advanced Route to Market Demonstrator (ARMD) competition, a more agile smaller scale funding intervention. Following on from its success, we have just launched ARMD3 to develop not only a product but also process demonstrator, recognising the importance of digitalisation in innovation, to be exhibited at the Cenex Expo in 2025.

Our Technology Demonstrator Accelerator Programme (TDAP) was launched in 2015 and has proven to be a fantastic springboard for SMEs with great ideas. It focuses not only on technology development, but also developing a robust business strategy, IP protection, and identifying routes to market – helping SMEs navigate the valley of death and attract further investment. It is a great example of how nurturing skills, expertise and some blue skies thinking can really take innovation to the next level – with a relatively small funding pot and a lot of enthusiasm!

One example which really brings the APC funding journey to life is that of EMPEL Systems, a business who successfully completed TDAP in 2020, were a part of a consortium during the pandemic in the first ARMD programme and are now part of a CR&D programme. Founded in 2019, they were awarded TDAP funding to develop high-quality customisable motor inverter units with cross sector applications. In 2021 they were part of a £1.7m ARMD project developing highly efficient, power dense electric vehicle technology, and are now part of a consortium to deliver the £13.3m e-MOTIF CR&D project which will see them develop and manufacture inverters in the UK. They are a real APC success story, demonstrating how different targeted interventions can develop both a technology and a business through to commercialisation - creating jobs, reducing CO2 and anchoring a supply chain in the UK.

But it isn’t just about funding. It’s also about collaboration: Between Government, Industry and Academia; between project partners; between APC and projects. And I think we at APC have a very important role to play in facilitating, supporting and driving forward innovation in the UK automotive funding landscape, and being creative in the ways we can help projects succeed.

Caroline McMillan-Browse is Finance Director at the Advanced Propulsion Centre UK (APC)