In conversation with Paul Butler, Chief Executive of the North East Automotive Alliance (NEAA); and Ryan Maughan, founder and MD of AVID Technology, about the opportunities electrification offers the North East.
What is electrification, and why is this change in energy production and usage important for the North East?
“Electrification is a key part of the government’s plan to bring all greenhouse gas emissions to net zero by 2050.
“Prime Minister Boris Johnson today (18 November) announced a ban on the sale of new petrol and diesel cars and vans from 2030, and hybrid vehicles from 2035, signalling the government’s commitment to its Net Zero 2050 strategy.
“Today, the North East is leading the UK’s electrification agenda and is best placed to capitalise on the global electrification mega trend driven by regulatory compliance for CO2 reduction and the UK’s Net Zero 2050 strategy. This is thanks to Nissan’s foresight to invest in the Nissan LEAF and Battery Plant production at its Sunderland Plant back in 2010, with production starting in 2013; and innovative SMEs such as AVID Technology and Hyperdrive Innovation driving the early electrification activity.”
“Electrification – in simple terms – is the transition of vehicle powertrains from petrol and diesel, to powertrains that use electricity.
“It represents a huge opportunity for the North East because of the established sectors we have in automotive and energy, as well as the skills and expertise we have around the tech involved in electric vehicle powertrains.”
Paul, you are the Chief Executive of the North East Automotive Alliance (NEAA) and Ryan, you are the founder of AVID Technology, which manufactures components for electric vehicles. Is the region well placed to capitalise on electrification? Why?
“Quite simply it’s our inherent capabilities. We are home to Europe’s most successful EV, the Nissan LEAF; to Europe’s first giga battery manufacturing facility, one of three EV battery manufacturing facilities in the North East; and we have the full power electronics, motors and drives (PEMD) capability here in the region – no other region in the UK can lay claim to that. In addition, the former Regional Development Agency, ONE NorthEast, invested in charging infrastructure and this investment has continued as Sunderland is home to the UK’s first superfast charging station, which opened in April 2019. In addition, 17 of the 21 automotive R&D sites across the region are focussed on electrification.
“We’re the only region in the country with these kinds of credentials. From this solid base we must continue to develop and build our capability and drive forward the electric agenda in the UK.”
“As a region we have real strengths in vehicle manufacturing, and a lot of talent and expertise in areas like motor controls, electric controls etc.
“The automotive industry is undergoing a huge transition because of electrification and we need to look at how we build capacity across the sector.
“The North East is well placed to respond because we already have one of the most established manufacturing sectors around electric vehicles in the world.
“There’s work to do to make sure we make the most of the transition to electrification and the opportunities it provides, but we already have a significant head start.”
How does electrification form part of the North East LEP’s wider decarbonisation and sustainability agenda?
“Vehicle omissions are one of the biggest contributors to CO2, so the electrification of the sector would have a huge impact. We see the automotive sector being an early adopter, with other sectors like construction, manufacturing, and rail following.
“Electrification is a huge opportunity to address decarbonisation and the climate emergency.”
“A big part of the North East Strategic Economic Plan is focussed on advanced manufacturing, and electrification has a major role to play in that, particularly in sectors like automotive, transport and aerospace.
“The North East used to be based around heavy industry, where as now the new industries we’re growing are focussed around renewable energy, the production of machinery for renewable power, and clean transportation. The North East is a trailblazer in that way.”
What are your plans for North East electrification and what kind of timescales are we looking at?
“It’s happening now, programmes like EV North and Driving the Electric Revolution are driving the agenda for our vibrant North East electrification community. Through EV North, our members have set out their strategy and vision for our future.
“However, electrification and the technology going into future vehicles open up the market for non-automotive companies. We need to raise awareness of these opportunities and support companies to enter the market to grow our regional capability and help businesses diversify and become more resilient.”
“My company, AVID Technology, has been involved in vehicle electrification for the past 15 years. Electrification has reached a tipping point in that demand from the market has really grown in recent years. It’s important that, as a company, we’re in the right place to ride that wave and meet the market demand.
“Looking wider, along with Paul and the North East LEP, I’m really passionate about growing the ecosystem in the North East for the benefit of all the businesses working in relevant sectors. I want to help build the talent pool, grow the cluster, and see our region at the forefront of the sector.
“The new legislation banning the sale of new petrol, diesel and hybrid cars from 2035 and the climate change crisis have had a combined impact. Things have to change and we must address air quality and CO2 emissions. The answer is electrification.
“The legislation has actually made it easier for manufacturers to invest in electrification. Before, many weren’t willing to take the risk and only a handful were focussing on R&D. What the legislation has done is level the playing field, it has de-risked electrification for OEMs (original equipment manufacturer) and there is now a lot of investment in electric powertrain development.”
How will this help with the region’s recovery post COVID-19?
“Electrification is a huge market opportunity for the North East. Forecasts just for the PEMD market suggest growth of around £5bn by 2025, largely driven by the automotive sector, but expanding to more than £80bn by 2050 as electrification becomes commonplace in other sectors.
“We do need to consider the impact of our exit from the EU, particularly around rules of origin which drives requirements for UK content. There is, however, a lot strategic focus across the UK on supply chain development from UK Government, the Automotive Council, SMMT, the North East LEP, the NEAA and others.”
“We need to build a robust regional economy that’s based on creating things – high value-added products that have a long-term sustainable future.
“We need to be encouraging school children to have an interest in STEM subjects and bringing the right inward investments into the region. We also need to create the right environment for start-ups, and do all of this with a long-term view.
“We have to work to the coherent, long-term vision set out in the North East Strategic Economic Plan and help transform the region to high value-added, high tech jobs in engineering and design, low carbon technologies, renewable energy and electrification.”
How can people get involved and find out more?
“If anyone would like a conversation about the electrification agenda, please contact the team at the North East Automotive Alliance (NEAA). We really want to support companies to enter the market and contribute to its growth in the North East, and we have support programmes funded through ERDF to support SMEs on this too.”