Opportunities arising from disruption in the automotive sector: a UK perspective
File(s)
Author(s)
Shorten, Robert
Taiber, Joachim
Type
Report
Abstract
Executive Summary
This report provides an overview of the transformational forces in the automotive sector at a global level and their implications for the UK. The sector is currently going through a
non-linear disruption driven by technology, climate change, geopolitics and demographics.
Climate change has led to regulatory mandates in both
the EU and UK, forcing the industry to move towards electric vehicles (EVs) – although its traditional core competencies and supply-chain capabilities were based on the internal combustion engine (ICE). The US initiated a market and innovation-driven approach towards electromobility and artificial intelligence (AI), which was followed by China.
China itself used its market size, government support and supply-chain network to become a dominant player in EVs, and is quickly catching up in AI, including AI-enabled automated vehicles (AVs). The EU has found itself in a defensive situation, suffering from competitive inferiority both in its supply chain and in its available product and service portfolio.
In this report, both UK and non-UK roadmaps are analysed to find out whether the UK is well prepared for the future
of mobility. In general, we can say that the right policies and regulations are in place to support the mass electrification and full automation of the automotive sector. However, due to a shrinking manufacturing base and dependency upon the EU market – which faces substantial competitiveness issues in the electric-vehicle supply chain and in the adoption of fully automated driving – the UK risks becoming less significant in the automotive sector from a global perspective, and ultimately losing strategic relevance.
Meeting the targets of the zero-emission vehicle (ZEV) mandate is a major concern, because of the low level
of EV adoption and the lack of deployment projects involving AI-enabled fully automated vehicles. The
missing demand for EVs is driven by a lack of affordable and innovative vehicles produced in the UK and EU that are available to the consumer. This has implications for
the available private funding for necessary expansions,
and for the transformation of the supply chain and charging infrastructure.
Nevertheless, the use of privately owned vehicles remains dominant for the average UK household. There are no incentives to shift mobility behaviour towards the use of commercially operated zero-emission, AI-enabled automated vehicle fleets.
In general, the average weight of electrified vehicles is too high, and the use of smaller zero-emission urban vehicles is not supported through incentives. This fact is influencing the lifecycle energy performance of vehicles and their operation, as well as non-tailpipe pollution such as tyre emissions and inequalities regarding passenger survivals rates in vehicle-to-vehicle collisions. The waste of space caused by parking is widely accepted in the UK, and not regulated – although automated driving technologies are becoming available to tackle this.
A key opportunity for the UK automotive sector is to further develop R&D and manufacturing competences in battery-cell core components, as well as in AI chip design and AI algorithm development. The UK could take the lead in developing a software-defined vehicle (SDV) ecosystem that could be an alternative to platforms recently developed in China. Most important is the development of a highly flexible AI-enabled system infrastructure for mobility, which would be compliant with all relevant sourcing rules that may be considered for geopolitical reasons. In addition there is also an opportunity for the UK to develop a lead position in silicon carbide (SiC) power electronics chip manufacturing process technology, which is highly relevant for the design and manufacturing of EVs.
Another substantial opportunity is in developing a
large-scale deployment of fully automated zero-emission mobility services in urban environments, with commercial fleet operators complementing public transit solutions.
A key suggestion from this preliminary work is to consider the implementation of collaborative platform initiatives to address the competitiveness of the UK automotive sector in an ecosystem approach. These programmes would address core automotive system components, core development processes, and the impact on waste, health and usage behaviour to build products and services that are globally competitive. Universities, fleet operators, automotive OEMs, suppliers and government agencies should be considered key stakeholders.
The goal of the platform initiatives would be to establish
a highly competitive automotive ecosystem in the UK – one that is ready for the future of mobility, and that will attract and retain top talent.
This report provides an overview of the transformational forces in the automotive sector at a global level and their implications for the UK. The sector is currently going through a
non-linear disruption driven by technology, climate change, geopolitics and demographics.
Climate change has led to regulatory mandates in both
the EU and UK, forcing the industry to move towards electric vehicles (EVs) – although its traditional core competencies and supply-chain capabilities were based on the internal combustion engine (ICE). The US initiated a market and innovation-driven approach towards electromobility and artificial intelligence (AI), which was followed by China.
China itself used its market size, government support and supply-chain network to become a dominant player in EVs, and is quickly catching up in AI, including AI-enabled automated vehicles (AVs). The EU has found itself in a defensive situation, suffering from competitive inferiority both in its supply chain and in its available product and service portfolio.
In this report, both UK and non-UK roadmaps are analysed to find out whether the UK is well prepared for the future
of mobility. In general, we can say that the right policies and regulations are in place to support the mass electrification and full automation of the automotive sector. However, due to a shrinking manufacturing base and dependency upon the EU market – which faces substantial competitiveness issues in the electric-vehicle supply chain and in the adoption of fully automated driving – the UK risks becoming less significant in the automotive sector from a global perspective, and ultimately losing strategic relevance.
Meeting the targets of the zero-emission vehicle (ZEV) mandate is a major concern, because of the low level
of EV adoption and the lack of deployment projects involving AI-enabled fully automated vehicles. The
missing demand for EVs is driven by a lack of affordable and innovative vehicles produced in the UK and EU that are available to the consumer. This has implications for
the available private funding for necessary expansions,
and for the transformation of the supply chain and charging infrastructure.
Nevertheless, the use of privately owned vehicles remains dominant for the average UK household. There are no incentives to shift mobility behaviour towards the use of commercially operated zero-emission, AI-enabled automated vehicle fleets.
In general, the average weight of electrified vehicles is too high, and the use of smaller zero-emission urban vehicles is not supported through incentives. This fact is influencing the lifecycle energy performance of vehicles and their operation, as well as non-tailpipe pollution such as tyre emissions and inequalities regarding passenger survivals rates in vehicle-to-vehicle collisions. The waste of space caused by parking is widely accepted in the UK, and not regulated – although automated driving technologies are becoming available to tackle this.
A key opportunity for the UK automotive sector is to further develop R&D and manufacturing competences in battery-cell core components, as well as in AI chip design and AI algorithm development. The UK could take the lead in developing a software-defined vehicle (SDV) ecosystem that could be an alternative to platforms recently developed in China. Most important is the development of a highly flexible AI-enabled system infrastructure for mobility, which would be compliant with all relevant sourcing rules that may be considered for geopolitical reasons. In addition there is also an opportunity for the UK to develop a lead position in silicon carbide (SiC) power electronics chip manufacturing process technology, which is highly relevant for the design and manufacturing of EVs.
Another substantial opportunity is in developing a
large-scale deployment of fully automated zero-emission mobility services in urban environments, with commercial fleet operators complementing public transit solutions.
A key suggestion from this preliminary work is to consider the implementation of collaborative platform initiatives to address the competitiveness of the UK automotive sector in an ecosystem approach. These programmes would address core automotive system components, core development processes, and the impact on waste, health and usage behaviour to build products and services that are globally competitive. Universities, fleet operators, automotive OEMs, suppliers and government agencies should be considered key stakeholders.
The goal of the platform initiatives would be to establish
a highly competitive automotive ecosystem in the UK – one that is ready for the future of mobility, and that will attract and retain top talent.
Date Issued
2026-12-18
Citation
2026, pp.1-45
Publisher
Imperial College London
Start Page
1
End Page
45
Copyright Statement
© 2026 The Author(s).
Subjects
automotive
centre for sectoral economic perfomance
disruption
report
Publication Status
Published