The Society of Motor Manufacturers and Traders (SMMT) is calling for stronger support to turn automotive research into commercial manufacturing in Britain, after a survey of specialist businesses identified the transition from development to production as the industry’s largest growth barrier.
The survey found that 83.9% of respondents would be more likely to establish or expand automotive research, development and innovation (RD&I) activity in the UK over the next five years if government support improved and operating costs became more competitive. Of those surveyed, 38.7% said they would be significantly more likely to increase investment.
The findings form part of SMMT’s Turning Automotive Innovation into UK Investment report, published on 4 November. The research surveyed 31 members specialising in automotive RD&I, including six high-volume vehicle manufacturers, 14 advanced component and propulsion technology suppliers, seven software and services providers, and four luxury, performance or low-volume manufacturers.
The percentages describe the responses of that specialist sample rather than the views of the entire automotive manufacturing sector. They nevertheless identify a distinction between Britain’s established research capabilities and the conditions needed to develop technologies into commercially viable products.
The UK automotive industry invested approximately £5.3 billion in research and development during 2025, according to SMMT. Its activities span battery technologies, electric propulsion, lightweight materials, vehicle software, artificial intelligence, cybersecurity and automated driving systems.
Nearly three quarters of respondents, 74.2%, identified access to skilled people as an advantage of conducting automotive research in Britain. University collaboration was selected by 58.0%, while 52.5% identified government funding support.
Those strengths have helped establish a network of 24 automotive research and development centres, approximately four fifths of which are situated outside London and the South East. Research capability is therefore already distributed across several established industrial regions, although the location of an engineering centre does not determine where the resulting technology will enter production.
Developing a battery system, power electronics assembly or lightweight component requires laboratory testing and engineering validation before a design can be manufactured consistently. Moving towards industrial production introduces further requirements for equipment, tooling, quality systems, materials supply and repeatability.
At the laboratory stage, a process may be developed to demonstrate the characteristics of a material or component. Pilot manufacturing establishes whether the same approach can operate repeatedly under conditions closer to commercial production, allowing engineers to investigate throughput, process variation and manufacturing yield.
Defects that are manageable during small-scale experimentation can become costly when production volumes increase. Material consumption, equipment availability and inspection requirements also change as a process moves from producing individual samples to supplying components against customer schedules.
The SMMT report identifies this transition as the principal barrier to growth. Its recommendations call for a targeted, multi-year programme supporting demonstration, pilot manufacturing and commercial scale-up, extending beyond funding for initial research activities.
Commercialisation finance presents a related constraint. Manufacturers developing advanced technologies may need substantial capital for equipment and process development before they can establish reliable production costs or secure sufficient customer revenue.
Vehicle programmes also impose demanding technical requirements. Components developed for production vehicles must meet specifications for performance, reliability and integration with other systems. Qualification can involve extended testing, changes to production methods and coordination with suppliers before a product is ready for volume manufacture.
Investment decisions therefore depend partly on whether companies can finance the period between a promising technical result and a production process capable of meeting commercial requirements.
SMMT is seeking improved access to patient capital to support this stage, alongside more predictable research incentives and policies that encourage long-term industrial investment.
Electricity costs and site infrastructure are further priorities. Battery manufacturing, materials processing and other advanced automotive operations can require substantial electrical capacity, making energy prices and grid connections important factors when companies evaluate prospective production locations.
A facility equipped for research may not have the power supply or physical infrastructure needed for industrial manufacturing. Installing additional process equipment can require new electrical connections, building modifications, environmental controls and supporting utilities.
Delays in providing that infrastructure can affect the timing of a commercialisation programme, particularly when production must be established within the development schedule of a vehicle manufacturer.
The report consequently links industrial electricity competitiveness with faster delivery of suitable sites and grid infrastructure. These proposals address conditions affecting factory deployment rather than the technical feasibility of the technologies themselves.
Among the respondents, 64.5% identified next-generation battery technology as a leading opportunity over the coming decade, while 61.3% highlighted artificial intelligence.
Battery development requires coordination between cell chemistry, component manufacture, thermal management, testing and integration into vehicle systems. Commercial production adds demands for repeatable material processing, inspection and control of manufacturing conditions.
Artificial intelligence presents different opportunities, including applications in engineering, digital twins, manufacturing and vehicle software. Its use within industrial processes depends on the availability of suitable operational data and the ability to validate the results of automated systems.
The SMMT report calls for closer connections between the UK’s AI strategy and these industrial applications, together with skills provision covering software, batteries, power electronics, automation and cybersecurity.
Mike Hawes, chief executive of SMMT, said: “British ideas should create British jobs and growth, as well as global opportunities.”
Hawes also argued that maintaining Britain’s position in automotive research would be insufficient if manufacturers subsequently established commercial production in competing countries.
Skills, equipment and finance requirements are closely connected during scale-up. A company may possess an established research team but still need manufacturing engineers, production technicians and quality specialists to develop and operate an industrial process.
SMMT is calling for a more coordinated approach involving government, research institutions, technology developers and manufacturers, with support extending from early engineering through to production investment.
Its proposals also include a stable framework for fiscal incentives, stronger commercial collaboration and measures to increase demand for technologies developed in Britain.
The report was published ahead of the government’s planned ten-year programme and subsequent spending decisions. Those processes will provide opportunities to establish whether additional funding and industrial policy measures address the demonstration facilities, manufacturing infrastructure and scale-up finance identified by the survey.
