Radical rethink of R&D investment required in 2020

Wednesday, January 15, 2020 - 10:07
Comments off
3,702 Views
R&D investment

Dr Geoff Davis pictured at HORIBA MIRA.

Continued disruption, restructuring and re-shaping of the automotive industry will be required to make increasing levels of R&D investment affordable whilst simultaneously representing a major growth opportunity in the year ahead, according to engineering consultancy HORIBA MIRA.

The proliferation of electrification and connected and autonomous vehicle (CAV) technologies will continue to be amongst the top automotive trends in 2020 which will continue to push up the already soaring costs of research and development (R&D). Indeed, latest figures show European auto manufacturers spent a record £33.3bn on R&D – 35% more than the £24.6bn spent in 2014/151.

At the same time, Bloomberg New Energy Finance has revealed the continued decline of diesel vehicles is giving way to the rising popularity of electric vehicles – with EV sales set to rise from 80,000 in 2019 to 131,000 in 20202. Meanwhile, the Society of Motor Manufacturers and Traders (SMMT) predicts that the mass-market potential of CAVs presents a £62bn annual economic opportunity by 20303.

With this in mind, HORIBA MIRA is expecting to see greater collaboration across the industry to join forces in making R&D investment more cost-effective – stating that partnerships between start-ups, major automakers and local and central governments are crucial.

Geoff Davis, Chief Strategy Officer at HORIBA MIRA and Member of the Automotive Council, said: “Amid a rapidly developing appetite for EV and CAV technologies, as well as fuel cells becoming a serious proposition, we are currently facing the most significant transformation of automotive mobility since the adoption of the car as a form of mass transportation.

“While this represents a massive opportunity to exploit previously untapped markets, it brings its own set of challenges that are, unsurprisingly, sending shockwaves through the automotive industry.

 “Given the increasing R&D costs and associated pressures, front of mind for many will be how to utilise emerging technologies as cost-effectively and profitably as possible to optimise their R&D activity. Prioritising R&D activities, as well as securing the talent required to deliver such programmes, will be key.

“In the year ahead, we predict continued disruption and change – one involving continued mergers, partnerships and joint ventures between start-ups, auto manufacturers and the supply chain – with the aim of making R&D more affordable, in order to truly reap the benefits of greener, connected and increasingly automated mobility.”

Another challenge in the coming year, adds HORIBA MIRA, will be the ongoing confusion surrounding Brexit and what it means for the industry. Painting a bleak outlook in November, the SMMT predicts that if the UK leaves the EU without an ambitious trade deal, 1.5 million vehicles will be lost from UK manufacturing by 2024 at a cost of £42.7billion4.

Geoff adds: “As an industry, the need for clarity on what Brexit means in terms of investment, regulatory alignment and collaboration has never been greater. A key focus this year will be working with the new government to ensure the UK remains at the forefront of global automotive innovation and deployment.”


  1. https://www.bdo.co.uk/en-gb/news/2019/top-20-carmakers-r-d-spend-tops-70bn-in-a-year
  2. https://www.theguardian.com/environment/2019/dec/25/2020-set-to-be-year-of-the-electric-car-say-industry-analysts
  3. https://www.smmt.co.uk/2019/04/uk-in-pole-position-in-62-billion-self-driving-car-race-if-brexit-roadblock-removed/
  4. https://www.smmt.co.uk/2019/11/only-ambitious-brexit-deal-will-safeguard-jobs-and-britains-green-future/

Comments are closed.

Advertise here