Andy Street is Mayor of the West Midlands, and is a former Managing Director of John Lewis.
Earlier this month, an announcement by Jaguar Land Rover electrified the West Midlands economy. The UK’s biggest carmaker revealed plans to build a range of new electric vehicles at its Castle Bromwich factory, starting with the new XJ model. The announcement meant the investment of hundreds of millions of pounds and job security for a skilled workforce of 2,500 people.
This signalled a new chapter for a site that built the Spitfires that won the Battle of Britain, which has been at the heart of the region’s automotive industry for generations.
Jaguar is just one of the many motoring names with links to the West Midlands: Rover, Singer, Triumph, Healey, Humber, Standard, Land Rover, Daimler, Morris, Austin, Hillman – the list goes on and on. When the UK’s population began to discover the joys of the open road in the twentieth century, it was our factories that produced the vehicles that got Britain moving. In 1960, with the UK’s first motorways driving private car ownership, the West Midlands’ workforce was the best paid in Europe.
Today, carmakers still call the West Midlands home. Over the last decade they have seen considerable success. After the financial crisis of 2009, production levels rose steadily, reaching a peak in 2016, thanks to investment and the popularity of our cars around the world. This progress must not be squandered. A No Deal Brexit remains a hurdle, potentially affecting supply chains and disrupting the arrival of just-in-time components to production lines.
The national Industrial Strategy, one of the defining legacies of Theresa May’s Government, earmarks the future of mobility as one of the UK’s ‘grand challenges’. Tellingly, the map it uses to outline the location of automotive activity glows red around the West Midlands, with 50 per cent of all research and development in the sector done within 25 miles of Birmingham.
If autonomous vehicles and greener power are to deliver an exciting new era in motoring, this investment in R&D is vital to turn ideas into reality.
But motoring markets and habits are changing. Younger people are not owning cars in the same way previous generations did. Our luxury manufacturers are seeing falling sales in territories such as China.
In the UK, this has meant a difficult time of late. Nissan has decided not to build a key new model at its plant in Sunderland. Honda will close its Swindon site in 2021. Ford plans to close its Bridgend engine plant in Wales by the end of next year. Here in the West Midlands, JLR faced tough choices too, announcing 4,500 job cuts in January.
One thing is clear: the future of the motor industry lies in electric and autonomous vehicles. The phenomenal popularity of Tesla in the USA, and the rapid adoption of electric in countries such as Norway, show that we are on the cusp of a seismic shift in motoring – and manufacturers are reacting to it. Over the next 18 months, new electric models will appear on the market, at more attractive mass-market prices.
The driverless car revolution is also quietly unfolding around us. Volkswagon and Ford are developing the Argo AI, intended to eventually deploy an autonomous taxi service. Google’s self-driving car project Waymo has now racked up 10 billion miles of simulated motoring, training and perfecting its software. In Detroit, the Motor City’s grand central station is being rescued from dereliction to become Ford’s new campus for mobility research, a clear signal of ambition and intent.
However, it is an ambition we match. The West Midlands is already the UK centre of driverless car testing. Autonomous vehicles are being put through their paces on the streets of Coventry and on the region’s motorways. Cutting-edge testing facilities found in Warwickshire are a hotbed of driverless motoring.
The West Midlands is pushing ahead with infrastructure changes – to road lay-outs and signage, for example – to enable autonomous vehicle testing. We are reaching out across the globe to entice more industry innovators to use our world-class facilities and share their knowledge.
In manufacturing, alongside JLR’s commitment to build vehicles at Castle Bromwich, electric drive units are being made in Wolverhampton, with battery assembly at Hams Hall in North Warwickshire. A new automotive cluster is taking shape here.
Now two more things are needed: the roll-out of a charging network – to change customer habits by giving vehicles longer rage and easier recharging – and battery manufacturing on a large scale.
The West Midlands needs a world-class ‘gigafactory’ capable of producing the batteries required to power our next generation vehicles. Battery manufacture is vital to the success of electric transport, as 40 per cent of a vehicle’s value lies in this crucial component. Batteries also form the heaviest part of the vehicle, meaning their production needs to be near the car’s assembly lines. Not surprisingly, battery development is where real innovation is being driven, and where our universities give us a real advantage.
Government has already played an important role in helping make the West Midlands competitive in this race, investing £108 million in a state-of-the-art Battery Industrialisation Centre in Coventry, and creating the Centre for Connected and Autonomous Vehicles. Now Government incentives could attract a global firm to create this much-needed gigafactory.
The biggest challenge lies in the infrastructure investment the new electric era will require – in terms of charging networks where vehicles can ‘refuel’ – and Government needs to step up to play its part. No single car manufacturer will be able to justify investing in such a vast endeavour.
It will be up to governments across the globe to intervene and accelerate a healthier and sustainable age of motoring, by creating charging networks and building capacity in power grids. New production facilities will require capital investment too.
This hugely important industry is undergoing rapid change. Through the Industrial Strategy, the Government’s role must be to support regional initiative and create the conditions for the West Midlands to take a leading role in the motor industry of the future. In the region that created the golden age of motoring, that’s an electrifying thought.