The automotive sector holds a distinctive and pivotal position within the UK economy. Beyond its substantial contributions to national outputs, employment, and value addition, the sector embodies a catalyst for future growth, aligning with the levelling up agenda and propelling the Net Zero transition.
In 2022, automotive-related manufacturing injected £78 billion turnover and contributed £16 billion in value added to the UK economy. The sector’s impact extends to the employment of over 208,000 individuals directly in automotive manufacturing and a total of 800,000 across the broader sector. Noteworthy within this context is the diversity epitomized by more than 25 manufacturing brands, collectively producing over 70 distinct vehicle models, complemented by the presence of specialized small-volume manufacturers.
This intricate ecosystem is further supported by approximately 2,500 supply chain businesses, housing some of the world’s most skilled engineers.
This paper offers a comprehensive analysis of the UK’s electric vehicle (EV) industry within the framework of economic policy and global value chains. It delves into the intricate dynamics involving supply chains, industrial policy, and critical dependencies.
The UK’s automotive sector confronts multifaceted challenges stemming from technological advancements, socioeconomic transformations, and geopolitical intricacies, necessitating the formulation of agile and responsive economic policies. The UK’s departure from the EU, as stipulated in the Trade and Cooperation Agreement, amplifies the complexities, particularly in navigating non-tariff measures and rules of origin that exert influence on EV exports. Within a landscape marked by heightened global competition characterized by escalating industrial policies on a global scale, the urgency of nimble responses becomes evident.
This research was conducted by Professor Jun Du Professor, Reader Luciano Battista and Dr. Oleksandr Shepotylo (Aston Business School). This work was supported by the UKRI Made Smarter Innovation Challenge and the Economic and Social Research Council via InterAct [Grant Reference ES/W007231/1].
For further discussions or potential applications/collaborations, please contact Jun Du.
Each year since 2019, the Observatory has gathered together a wealth of data to provide a snapshot of how the Midlands is faring and where the key opportunities lie.
The 2023 report details a challenging twelve months across the Midlands and the UK.
The report is split into two sections, based on the business plan published by the Midlands Engine earlier this year.
The first half explores how the region fared in terms of our key economic drivers: increasing productivity; innovating across sectors; building infrastructure for growth and increasing investment.
More in-depth stats are presented in a thematic deep-dive section covering the Midlands Engine’s five key themes: Green Growth; Advanced Manufacturing; Food & Agri-tech; Med-tech and Life sciences and New Market Opportunities.
InterAct is pleased to continue working with Midlands Engine as the Network moves into it’s final year of research. Following the sucessful development of the Future of Digital Manufacturing Ecosystems ‘Scenarios 2040’ report, InterAct will be hosting workshops focusing on the agri-food and medical technology sectors followed by in depth case studies of three midlands based manufacturing firms outlined in the report.
Discussing planned collaboration, InterAct Co-director, Professor Jan Godsell said: “At InterAct, we’re committed to working with businesses to help shape and co-develop our research to achieve the greatest benefits for regional and UK wide manufacturing.
By focusing our case study on the Midlands, we have a unique opportunity to support the thriving industrial base here and enable them to establish future systems of digital manufacturing – creating more resilient and prosperous supply chains which will enhance the productivity of the region and provide a blueprint for wider applicability to the rest of the country.”
InterAct researchers from the University of Sheffield based ‘Future of the Economy’ team led by Professor Vania Sena hosted the first of their Discovery Day events at the AMRC Factory 2050 on 16th November, 2023. Opened in April 2017, the venue is a fully reconfigurable assembly and component manufacturing facility for collaborative research, capable of rapidly switching production between different high-value components and one-off parts for prototyping and research and development.
This half-day workshop offered InterAct stakeholders from across the manufacturing and industrial digital technology sectors a chance to be introduced to part of the core mission of the Future of the Economy workstream.
The Discovery Day delved into the significance of advanced manufacturing zones, particularly in regional development, primarily focusing on South Yorkshire. The practical implications of these zones, the decision making behind them, and the strategy used was examined in detail by guest speaker Joseph Quinn of the South Yorkshire Mayoral Combined Authority (SYMCA). He shed light on the transformative potential of these zones in terms of job creation, economic growth, and innovation.
Joseph Quinn presents on the work of the SYMCA
Professor Sena explained to participants the initial findings of the team’s research and understanding of the multifaceted impacts of investment zones on the future of the UK economy. They then had the chance to pose questions understand the challenges and opportunities in advanced manufacturing, a theme intrinsically linked to the economic landscape and outlook.
Following this session, attendees were invited to take part in a tour of the exciting and innovative facilities within the AMRC Factory 2050. Putting into context the overall mission of InterAct to help facilitate the introduction of new industrial digital technology into manufacturing, visitors were able to engage with a variety of cutting edge technologies with input from the AMRC staff.
Attendees examine one of the industrial technologies on display at the Factory 2050
Following on from our successful Sandpit event at Loughborough University, InterAct has funded five projects examining a range of topics concerning the manufacturing sector.
Developing a strategy that will shape the rebranding of UK digital manufacturing
Principal Investigator:
Dr. Karl Warner – University of Glasgow
Co-investigators:
Dr. Nicola Bailey – King’s College London
Dr. Imtiaz Khan – Cardiff Metropolitan University
Dr. Anna Chatzimichali – University of Bath
Malek El-Qallali – University of Bath
Dr. Anastasia Kulichyova – Queens University Belfast
Project Outline:
This project aims to highlight the most probable future scenarios for rebranding manufacturing that can help stakeholders attract the next generation of young talent towards a career in UK digital manufacturing by 2040. This is rooted in the ambition of making the future of the sector a place that attracts, includes, and supports young talent from diverse backgrounds and mindsets.
Recent research conducted by Make UK – a UK manufacturers’ association – found that only 2% of the average UK manufacturing workforce is below 30 years old. These statistics are concerning considering current labour market inactivity rates and the shrinking UK population.
These statistics have triggered further research, including a large-scale InterAct Perceptions of Manufacturing survey that investigated UK public perceptions of the manufacturing industry and its place of work. Based on UK-wide survey of 2,000 people, a powerful message coming out of the results is that younger generations identify UK manufacturing as a less desirable brand, with many people being primarily uncertain about manufacturing employment prospects.
Using a variety of innovative methods to gather insights on potential rebranding opportunities from employers, educators, industry experts, policymakers and young people, this project intends to co-create the most probable future scenarios that can help stakeholders attract the next generation of young talent. This will enable the creation of a cross-generational map of peoples’ experiences of UK manufacturing – both past and present – that visualises potential opportunities for attracting the next generation of young talent towards a career in UK digital manufacturing.
Informing empathy-led change management: Creating a measurable readiness health plan for the adoption of digital technologies in manufacturing
Principal Investigator:
Dr. Mersha Aftab – Birmingham City University
Co-investigators:
Dr. Mey Goh – Loughborough University
Dr. Iryna Yevseyeva – De Montfort University
Project Outline:
The project aims to improve the success of technology adoption in manufacturing organisations using an empathy-led approach to create a measurable readiness health plan for change management.
Whilst the value of digital technologies is well accepted, the UK is not adopting these technologies as quickly as our competitors. The Made Smarter Innovation People-Led Digitalisation (PLD) Centre has identified this as a challenge. They note that digitalisation tools are abundantly available and advancing at pace, but adoption rates could be higher, and it is not always clear what values these tools bring to an individual worker.
When trying to infer the adoption of technology by a person, it is important to consider what values they attach to the use of that technology. The difficulty is that most values are intrinsic, tacit, and non-transferable.
The Empathy-Led Change Management team aims to develop an initial version of a digital toolkit for businesses. This toolkit will be able to map and demonstrate the readiness level of the workforce in a company in real time. It will also support management to introduce the right strategies of people-led change at the right point of readiness, so the adoption is bespoke and ‘made to measure’.
Manufacturing a better future – exploring inclusive digital manufacturing
Principal Investigator:
Dr. Marisa Smith – University of Strathclyde
Co-investigators:
Professor Nigel Caldwell – London Metropolitan University
Dr. Eun Sun Godwin – University of Wolverhampton
Dr. John Oyekan – University of York
Dr. Sebastian Pattinson – University of Cambridge
Project Outline:
This project is investigating how the use of digital tools can enable a more inclusive workforce in manufacturing. They will be focusing specifically on demonstrating how to engage disabled people to participate in digital design processes. The outcomes will include insight into removing barriers to entry for currently excluded groups to the manufacturing workforce.
The current focus in manufacturing policy and practice on equality and diversity has been limited to gender and ethnic diversity. Although according to Scope almost a quarter (23%) of the UK working age population are disabled, the industry has lacked a real interest in the inclusion of disabled people.
The employment gap between disabled and non-disabled people has also remained consistently high, at around 30% for the past 10 years, with a pay gap of almost 20% for disabled workers compared with non-disabled workers according to the Together Trust.
In order to counteract and overcome these challenges, the overall objectives of the project are:
To collaborate disabled people to understand how they can participate in digitalisation and manufacturing:
To gain a first-hand account of disabled people on manufacturing and working within the manufacturing ecosystem.
To understand technology developers’ expert view on technical constraints and adjustments with current digital technologies that need to be considered for accessibility of disabled people.
To explore how disabled people interact with AI interfaces and examine how the technology can be adapted to address any design challenges.
To build on the current InterAct 2040 scenarios by providing additional scenarios on inclusive manufacturing embracing disabled people through inclusive digital solutions.
To show small manufacturing non-adopters of digital tools the benefits and relative ease of adopting inclusive digital tools.
The project will provide greater understanding of how the digital divide, as well as the disability employment gap, can be narrowed through the inclusion of disabled people into the manufacturing ecosystem.
Community co-created distributed manufacturing platform (COCODISMAN)
Principal Investigator:
Dr. Elaine Conway – Loughborough University
Co-investigators:
Atanu Chaudhuri – Durham University
Dr. Usman Adeel – Teesside University
Jay Daniel – University of Derby
Project Outline:
The aim of this project is to develop a blueprint for a co-created, distributed, community-based manufacturing platform in the UK with a business model to support its financial viability and scalability.
In many UK communities, there is apathy towards manufacturing, a digital skills divide, unemployment challenges and low engagement with disadvantaged or hard to reach groups. Equally, local manufacturers need to adopt digital technologies to remain competitive but face severe skills shortages.
Recognising these issues, the team behind COCODISMAN will be carrying out a scoping exercise to discover what community needs exist for digital skilling and local manufacturing. Using this information, they will create a digital platform which matches the needs with deliverables as they currently exist in the community. The ultimate aim of this process is to provide the link between community needs for products and skills and local manufacturing facilities with excess capacity.
The project objectives are to:
Understand the challenges which local communities face in getting objects repaired and delivered at reasonable cost, their perceptions about manufacturing as a career choice and acquiring the necessary skills to gain employment in the manufacturing sector.
Understand the challenges faced by local manufacturers in upskilling their employees while embracing digital transformation and in attracting a future workforce to manufacturing.
Understand the challenges faced by local councils in creating meaningful learning and employment opportunities for young people to enter the manufacturing sector and in supporting the elderly population in accessing manufactured goods and services.
Assess the potential of a digital platform in changing the perception of the community towards manufacturing, improving skills, reducing the digital divide and improving youth engagement in manufacturing.
Support sustainable and localized production.
The COCODISMAN platform developed and rolled out at the end of the project will form the basis for greater collaboration by the researchers involved with partners such as local county councils, local manufacturers, and industry representative organisations.
The role of consumers in driving UK manufacturing’s digital transformation
Principal Investigator:
Professor Ana Isabel Canhoto – University of Sussex
Co-investigators:
Dr. Maren Schneider – Anglia Ruskin University
Dr. Ahmed Beltagui – Aston University
Ramin Behbehani – Brunel University London
Niraj Kumar – University of Essex
Project Outline:
The aim of this research is to identify the factors that lead consumers to adopt new Everything as a Service (XaaS) models of consumption, and drive the adoption of digitally enabled, distributed models of manufacturing.
XaaS is a business model for consumers to pay for access to a product’s benefits rather than own it outright. XaaS may take the form of acquiring a product whose performance is remotely monitored by the manufacturer. Parts are replaced or instructions issued to the consumer, as needed, through a maintenance contract, to extend the useful life of the product, a XaaS ‘stewardship-model’.
Alternatively, XaaS may take the form of acquisition of a service, with the manufacturer owing the machine and monitoring its maintenance needs, remotely, intervening when needed to ensure continued provision of the service, a XaaS ‘usership-model’ of consumption.
There are numerous benefits to XaaS including reducing manufacturers’ incentives to make products obsolete in order to generate additional sales, reducing electronic waste, increasing consumer retention, increasing consumers’ access to the latest technology, improving the energy efficiency of household appliances.
The project will attempt to achieve the following objectives:
Analyse viable XaaS models for washing machines.
Identify the factors influencing consumers’ acceptance of XaaS for washing machines.
Test the impact of those key factors in driving demand for washing machines under the stewardship vs. usership models.
Develop recommendations to support the development and implementation of XaaS in UK manufacturing.
If you’re interested in getting involved with any of these projects, you can contact the project team or email us at info@interact-hub.org.
InterAct representatives including Co-director, Professor Jillian MacBryde, were pleased to support the Women in Manufacturing initiative’s ‘Changing Perceptions’ conference on 31st October 2023.
Hosted at the state-of-the-art Manufacturing Technology Centre facility in Coventry, the event attracted industry leaders, policymakers, and aspiring professionals from across the country to share ideas and discuss the biggest challenges to female participation in manufacturing today.
The ‘Changing Perceptions’ conference was organised by the Institute for Manufacturing, University of Cambridge (IfM) and Innovate UK’s Made Smarter Innovation programme, with support from the High Value Manufacturing Catapult, InterAct and Lloyds Banking Group. It marks a major milestone in the activities put together by the Women in Manufacturing Initiative, a group dedicated to improving diversity and representation within the manufacturing sector.
Although women represent almost half of the labour force in the United Kingdom, they account for only 26% of all workers in the manufacturing sector.
Gender norms and stereotypes still segregate women and men into different occupations and economic activities. Women are also underrepresented in leadership positions, and this lack of diversity influences decision-making and firm performance.
The morning sessions of the conference sought to address some of the influencing factors behind these issues looking at: ‘Perceptions of Manufacturing: International Perspectives’, ‘How to Network Effectively’ and a panel discussion on ‘Promoting Diversity in the UK Manufacturing Sector’.
Throughout the afternoon, a series of workshops delved into various aspects of women’s roles in manufacturing, covering topics such as career advancement, mentorship programs, and strategies to overcome gender bias. Attendees had the opportunity to engage with seasoned professionals, share experiences, and gain insights into navigating the challenges unique to women in the manufacturing workforce.
Speaking to conference supporters Lloyds Bank about the importance of the event, organiser and Head of Industrial Technologies and Manufacturing at Innovate UK, Dr. Megan Ronayne said: “One of the main advantages of increasing diversity in manufacturing is that it raises innovation in the sector” and this can help to offset skills gaps and shortages in the workforce.
Whilst the Changing Perceptions conference made it clear that these are long-term issues, that require long-term solutions and investment to overcome, the enthusiasm and ideas generated for the Women in Manufacturing initiative was an inspirational takeaway for attendees.
If you want to learn more about how you can take practical steps to help address these challenges, you can read Dr. Castañeda-Navarrete’s report on ‘The case for a gender-transformative digitalisation’. This policy brief offers practical recommendations for businesses, industry associations, and research and government organisations to promote gender diversity and inclusion within the UK manufacturing sector.
Disruption, digital innovation, new business models… the world of manufacturing is changing rapidly, perhaps faster than ever before. To adapt and survive, businesses must anticipate changes, identify opportunities and make informed decisions.
The InterAct Future of Digital Manufacturing Ecosystems team, one of InterAct’s core research streams, is committed to developing co-created solutions to the challenges facing the UK manufacturing sector in the near future. This team has now put together a vital report that brings you the information you need, at your fingertips, outlining potential future scenarios and the associated opportunities for the manufacturing world.
Discussing the importance of this new work, InterAct Co-director and Future of Digital Manufacturing Ecosystems lead, Professor Jan Godsell said: “The future can often seem distant and subordinate to the problems of today, particularly in the supply chain and manufacturing sectors when it has felt as though we are living in an age of ‘permacrisis’, constantly fighting just to stay on track.
However, if anything, the impacts of conflict, pandemic, supply chain disruption, climate change and labour market shifts have proven the vital importance of considering potential futures, today. That’s why my team has produced this new report, to be used in conjunction with upcoming workshops and case studies to create a framework for businesses to effectively plan for, and mitigate challenges whilst exploiting new technological opportunities.
We’re excited to be working with organisations like Midlands Engine and Make UK on this project, and I look forward to inviting new and existing members of the InterAct Network to join us in co-creating this work.”
The scenarios outlined in the report map out four potential alternatives for the digital manufacturers of tomorrow:
Productivity Powerhouse
Flexibility as Standard
Sustainability Champion
Happy and Sustainable Workforce
Download the report to find out more about how the most useful measure of sustainable progress is total factor productivity, which accounts for inputs beyond labour – such as materials, energy and administrative time – to compare them against total outputs.
The IET Savoy Place, London hosted the InterAct Network’s second Annual Conference on 3rd October, 2023, bringing together a wide range of industry leaders, policy influencers, and academic experts. The central theme of the conference, “How do we create the digital manufacturing future we want?” provided a catalyst for discussions from 13 expert speakers who came together to deliver their unique insights on the challenges and opportunities for the future of manufacturing.
The conference began with an introduction from InterAct Co-director Professor Jillian MacBryde and ESRC Deputy Director of Impact and Innovation, Melanie Knetsch. Discussing the motivations and philosophy behind funding the InterAct Network, Melanie said: “What became apparent when we were first conceptualising the Made Smarter Challenge, was that this was more than just an R&D challenge. If you’re going to really understand manufacturing and support digital transformation you need to take a step back and understand the businesses, the structures, the people, the management, the training, and the skills involved within that.
“We needed to be able to bring people together who haven’t worked together before and adopt this multi-sector approach. That’s why it has been an absolute pleasure to watch it [InterAct] grow and develop over the last two years as a community has come together.”
The morning session then continued with talks from Peter Cheese, Chief Executive of the Chartered Institute of Personnel and Development (CIPD), who kicked off proceedings by offering insights into the future of work, emphasizing the pivotal role of human resources in shaping the workforce of tomorrow.
Ben Armstrong, Executive Director of MIT’s Industrial Performance Center, then delved into the benefits and potential pitfalls of automation, providing an international perspective on the opportunities that lie ahead.
The session then continued to explore InterAct’s core themes: the Future of the Economy, the Future of Work, and the Future of Digital Manufacturing Ecosystems. Expert speakers shared their own unique perspectives on the broader topics, providing the basis for the afternoon discussions. You can watch all the talks here.
Preceding the afternoon session, the final keynote speaker Ved Sen, Head of Business Innovation at Tata Consultancy Services (TCS), shared his views on the habits of innovative companies. Charting the different approaches some of the worlds biggest companies take to developing a culture of innovation that fosters ingenuity and market leading thinking.
In the interactive segment of the day, attendees had the opportunity to workshop questions amongst themselves to pose to a panel of experts. The panel, comprising thought leaders from diverse backgrounds, discussed critical themes and issues facing the manufacturing sector.
As the curtains closed on the second InterAct Annual Conference, Professor Janet Godsell expressed gratitude to the speakers, sponsors, and attendees for contributing to a vibrant and collaborative event atmosphere. She reiterated the Network’s commitment to building dialogue and connections, highlighting the proactive role InterAct is taking in bringing stakeholders together through events such as these.
In a world where perceptions shape industries and policies, understanding the narrative surrounding manufacturing is crucial. InterAct has recently published a report which analyses the perceptions of manufacturing in the United Kingdom and compares it with six other countries.
The aim of the report is to support InterAct research on the future of manufacturing by providing insights into attitudes to manufacturing and industrial strategies, and how manufacturing is discussed in other countries, particularly where digital technologies have been adopted.
Public perceptions of manufacturing across countries and over time
Although governments remain hesitant to explicitly champion “industrial policy”, the renewed commitment to manufacturing, as evidenced in the UK’s Advanced Manufacturing Plan, underscores its pivotal role in national economies which is increasingly acknowledged by policymakers.
The multi-country review, encompassing the UK, Canada, Germany, Singapore, South Korea, Switzerland, and the US, revealed more positive perceptions of manufacturing in Germany and the US compared to the UK. However, perceptions within the UK have shown improvement. In 2001, the British public believed that the country could thrive without manufacturing. In contrast, by 2023, 93% of the public believe that the manufacturing industry is essential to economic growth and resilience.
Across countries, including the UK, a consistent trend persists; younger people exhibit the least interest in pursuing careers in manufacturing. The prevailing perception, widely held among teenagers and young adults, is that the industry is predominantly male and lacking diversity compared to other sectors. Additionally, manufacturing is perceived as being poorly paid, repetitive, and not requiring high-skilled labour. These misconceptions pose significant challenges in attracting new talent to consider the manufacturing sector as a viable and rewarding career path.
Understanding the policy and perception nexus
Industrial and innovation policies play a significant role in shaping public perceptions, which can sometimes differ from reality. Terms like “advanced manufacturing” increasingly highlight the high-tech nature of the industry. National strategies also underscore manufacturing’s role in economic growth, innovation, and regional development.
Women tend to be underrepresented in manufacturing, especially in high-tech industries. For instance, in the UK, women account for 26% of the manufacturing workforce, and their representation is even lower in high-tech sectors such as automotive and aerospace. However, gender disparities within the sector remain largely unaddressed across policies, reflecting a notable blind spot.
Megatrends reshaping manufacturing
Megatrends reshaping manufacturing, such as environmental sustainability and digitalisation, persist as top priorities in industrial and innovation strategies. The interrelation of such megatrends is also becoming an area of interest in policy making. In addition, the impacts of the COVID-19 pandemic and geopolitical tensions have led to an increased emphasis on resilience, national security, value chain reconfiguration, and technological sovereignty.
These shifts in priorities and the continued focus on digitalisation and environmental sustainability have broadened the scope of activities and value chain segments within manufacturing. Notably, there is a growing emphasis on areas such as design and recycling, and the blurring boundaries between manufacturing and services.
Addressing challenges and charting a new path
This latest InterAct report highlights the evolving perception of manufacturing, emphasising the intrinsic link between policy and public perspectives. It highlights manufacturing’s multifaceted role in economic growth, innovation, and social inclusion, while also indicating pathways for improvement.
The report provides four recommendations in moving forward:
Systematic collection of data (yearly or every 2 years) about how the public perceives manufacturing and the role of the digital and green transformations in shaping perceptions.
Leveraging the manufacturing observatory, outlined in the UK Advanced Manufacturing Plan, to constantly monitor policy developments across different contexts. This includes how manufacturing and related terminologies are defined and portrayed.
Setting measurable targets and initiatives aimed at enhancing diversity in manufacturing.
Providing education and career information about manufacturing from the early stages.
Watch a short explainer video about the importance of sector perception to the future of manufacturing
This report presents insights into how manufacturing is perceived, the factors shaping this perception, and how this perception has evolved in the last decade. The findings draw upon a systematic review of academic, grey and policy literature across seven countries: the United Kingdom (the UK), Canada, Germany, Singapore, South Korea, Switzerland and the United States (the US).
The report is the main output of the InterAct-funded project “How to make manufacturing charming again? It is everything, everywhere, all at once”. The aim of the report is to support InterAct research on the future of manufacturing on an international scale by providing insights into attitudes to manufacturing and industrial strategies, and how manufacturing is discussed in other countries, particularly where digital technologies have been adopted.
This research was conducted by Dr. Guendalina Anzolin (IfM, University of Cambridge), Dr. Jennifer Castañeda–Navarrete (IfM, University of Cambridge) and Dr. Dalila Ribaudo (Aston University). This work was supported by the UKRI Made Smarter Innovation Challenge and the Economic and Social Research Council via InterAct [Grant Reference ES/W007231/1].
The European Union’s (EU) new battery regulations (Regulation 2023/1542 ), introduces many new legislative measures, including specific requirements for battery passports and smart labelling. It marks a significant shift towards enhancing sustainability and transparency within the battery value chain.
These battery regulations are pivotal in advancing the EU’s Circular Economy Action Plan. As the UK navigates its post-Brexit landscape, aligning with these regulations is crucial for maintaining trade relations and environmental standards. Recent InterAct funded research provides a comprehensive analysis of the UK’s readiness to adapt to these regulations, offering insights that highlight both opportunities and the challenges ahead.
New regulatory requirements
Under the new rules, there will be enhanced information and ICT system requirements for entities introducing batteries and battery powered products to the market. This applies to any economic operator involved in making batteries available in the EU, whether as separate components like cells, modules and packs, or as part of larger products. It also includes those who change a battery’s intended use or are involved in refurbishing or remanufacturing.
A key feature of the regulation is the mandatory inclusion of a QR Code on all batteries, facilitating the use of ‘smart label’ and ‘battery passport’ functionalities, varying by battery type. While specific operators are obligated to provide this information, in practice, a broader network of stakeholders will likely contribute, creating an integrated, multi-stakeholder ‘battery information ecosystem’. This ecosystem will span the entire value chain and lifecycle of battery products, supporting both passport and smart label functions with information from a diverse array of operators.
The analysis includes results from a nationwide survey, completed by 80 organisations, including 21 large, 28 medium-sized, 23 small enterprises, and eight micro-businesses, also representing a wide spectrum of products and activities across the battery value chain/system.
The findings from the survey were discussed in a roundtable discussion and follow-up interviews, available here, which offer a multi-dimensional perspective on the readiness and concerns of the UK battery sector. This breadth of participation underscores the comprehensiveness of the findings, capturing a wide array of viewpoints and insights from a variety of actors along the value-chain from beginning of life to end of life.
Awareness and attitudes towards regulation
The survey revealed that 63% of organisations were unaware of the new regulations, with this figure rising to 73% among UK-based suppliers to the EU. This lack of awareness is concerning, as it indicates a potential gap in readiness for compliance.
The industrial context of these regulations is complex. While there is optimism about the potential for more sustainable and circular business practices, there are also concerns about the administrative, technical and financial burdens the Battery Passport and Smart Labelling requirement might impose. The majority view these requirements as a significant challenge, with only a minority seeing any substantial benefits.
Information readiness: a critical gap
A significant challenge identified in the survey is information readiness. Many businesses reported inadequate access to crucial data on battery materials and supply chain details. This includes information on recycled material content, hazardous substances and critical raw materials, as well as supply chain transparency for components like battery separators and cell casings.
Only about half of the respondents felt confident in the accuracy and completeness of their records, highlighting a pressing need for improved information sharing and data management systems.
ICT challenges and opportunities
The survey underscored the significant challenges in ICT, data, and workflow requirements for compliance. The responsibility for the Battery Passport primarily lies with the manufacturer, who is required to create and maintain these records for each battery throughout the battery’s lifecycle.
In some cases, other economic operators also have roles to play in maintaining or updating certain information, yet many organisations lack the necessary systems and expertise to collect, create, share and report the required data. However, this also presents an opportunity for innovation in the sector, with the potential for new technologies and systems to streamline these processes.
Implications for UK battery producers and UK policy
More needs to be done to raise awareness and demystify the compliance obligations of UK battery manufacturers and producers. It was felt that the new regulations would dominate the focus of day-to-day business activities for several years.
Other issues raised – such as fragmented industry practices, lack of clear guidelines, and the complexity of supply chains – would benefit from clear policy directions, enhanced data management systems, and increased international and value-chain collaboration, which were seen as critical to overcoming these challenges.
The regulation necessitates a collaborative effort from manufacturers, producers, importers, and distributors of all battery types and is essential for implementing substantial changes in areas such as labelling, end-of-life management, and supply chain due diligence. Additionally, there is a need for establishing incentives that will enable increased collaboration between beginning-of-life and end-of-life operators.
