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CBI: Driving change - How business is accelerating the zero-emission transition
Carolyn Fairbairn yesterday addressed an international audience at the government's Zero-Emission Vehicle Summit, in Birmingham.
Thank you, and good morning. It’s great to be at the Zero-Emission Vehicle summit, and it’s particularly good to be in the West Midlands. It feels like a day when, in the best possible way, history is repeating itself. Because in 1884, a man called Thomas Parker built a factory, just 10 miles from here, in Wolverhampton.
There he launched the world’s first production electric car. It was a pioneering first – and it’s extraordinary to consider that, by the turn of the last century, up to a third of all cars on our roads were electric. Electric cars held the first 6 land-speed records – in 1899, breaking the 100-kilometres-per-hour barrier for the first time. So, these were great times for the zero-emission vehicle.
The opportunity we face
But today, I think we can agree on something: that though those may have been great times, the greatest times lie ahead. Because we meet at a rare moment. We, our generation, has a historic responsibility: to redefine the future of travel.
For the first time since the internal combustion engine roared onto our roads, a new chapter in the history of transport is being written. And it is being written by the innovators, the entrepreneurs, the businesses and policymakers across the world - so many of whom are in this room today.
This morning, the Prime Minister set out the UK’s targets. Our goal is that by 2030, half of all new cars will be zero-emission. By 2040, you won’t be able to buy a new fossil fuel car at all. And by 2050, practically every vehicle on our roads will be emission-free.
These are stretching goals. Other countries have their own, many equally stretching. And if those goals are met, the rewards will be world-changing; cleaner air in our towns and cities; better, safer transport; healthier lives for our children, citizens, and employees, and a global industry that by 2030 will be worth £2 trillion a year. That’s the size of the prize for everyone.
How business is responding
The transition we are talking about is arguably the most dramatic and beneficial we will see this century. It will transform millions of lives for the better. And my first point today is that the best - and indeed only - route to achieving it is the competitive marketplace.
Because it is the market, with its unique power to drive innovation through competition; its ability to match demand with supply; its capacity for lifting expectations for quality of life; and its potential to pit different technologies one against the other that will make the zero-emission transition possible.
So let me tell you how business is responding. My organisation, the CBI, speaks for 190,000 firms. We have offices and members all over the world. And I can say, unequivocally, that business is seizing this opportunity. Companies are pouring billions into innovation, research and development.
Last year, the global car industry built and sold a million zero-emission vehicles – a record number, which means there are now 3 million on the road.
But this is only the beginning. Nissan, Renault and Mitsubishi are collaborating on 17 electric models with the aim of selling 14 million a year by 2022. DHL is set to build 20,000 of its own electric vehicles each year for parcel delivery services.
And it’s not only electricity, but hydrogen too, with Toyota preparing for a new generation of hydrogen fuel cell vehicles in the early 2020s. That’s what business is doing to support the greatest technological shift of this century.
Three opportunities to meet our goals
Yet we also know that the transition will not be easy. Nothing on this scale ever could be. So today I want to offer a message - from business - about how that transition can be made smoother, easier and faster. Three ways to ensure success. And these are:
- Deeper international collaboration
- Faster innovation
- And, building consumer confidence and demand.
Let me start with international collaboration. Right now, countries around the world are setting their targets and making plans to meet them. But let’s be frank. To meet those targets, we must work together. No one country can succeed alone.
And that means keeping trade strong. Of the 30,000 parts in a car built in the UK,15,000 are imported from abroad, and the finished product will be exported to a hundred countries or more. There’s a reason this industry is international: launching a car is expensive, especially a car that uses new technology. It requires a global marketplace.
And that’s why the zero-emission transition needs free trade. Protectionism is dangerous, not just for business, not just for consumers, but for our environment. Protectionism is the wrong answer, to the wrong question, at the wrong time, and it’s having consequences. Look at how tariffs have increased the price of a Tesla in China; a country that has so far been Tesla’s second biggest market. So our first opportunity for accelerating the transition is to deepen international collaboration on free trade.
But there’s another international opportunity. The international nature of this industry broadens markets, but it also fosters specialisation. Already in the zero-emission transition, different countries are emerging as leaders in their field. That’s a good thing. But to reap the rewards of specialisation we must also secure the certainties of standardisation. You’ll know why common standards matter if yesterday you travelled to the UK, reached your hotel, tried to charge your phone, and discovered the UK’s rather unusual plug socket – and had to call down to reception for an adaptor.
There’s a lesson there. If decisions in haste are repented at leisure, then decisions alone are repented together. So in the race to create new products, let us agree common standards. It will take consultation and collaboration, a measure of give and take. But if emissions are a global problem, then we need global solutions.
The opportunity of innovation
And that brings me to the second opportunity. Faster innovation. Again – we know where we’re going. But getting there requires ideas and technology that don’t yet exist. We’ll need ever-better batteries, faster charging, renewable materials and energy and much else besides.
Altogether, this transition presents the greatest set of technical challenges since the space race. And like the space race, they’re not challenges business or government can solve alone. There’s a vital third partner: our universities. Because it’s in the university research departments, the laboratories and the PhD theses that so much of this technology will first take shape.
And if innovation is to be accelerated, not only do we need our universities, our universities need each other - to bring the best minds together, and then through business to bring ideas to market.
In Europe, universities and businesses have already built links across the continent. The European Framework Programmes, for instance, have been great at connecting science and industry. And they’ll be all the stronger with the UK involved after Brexit. But let’s now extend those partnerships beyond Europe, to the US, China, India, Japan – and other countries – so continental links become global links. Because our universities are the hinge on which the door to transition turns.
The opportunity to build consumer confidence
Finally, the third great opportunity. I’ve spoken about international collaboration, and faster innovation, but I want to finish by talking about consumers - about the people who will use these new vehicles to go to work, to take their children to school, to go on holiday.
Because if we want companies to show the same boldness that Thomas Parker did at the dawn of the automotive age – to place bets on a future whose shape no-one can clearly see – then the conditions must be right. In short: the demand must be there, and the confidence there to create it.
Because the transition is not just about ensuring we build the zero-emission vehicles. It’s about ensuring people want to buy them, encouraging people to see that their next car must be a zero-emission car, giving people the confidence to move away from a technology that has defined our lives for a century - as big a change as any of us will experience in our lifetimes.
At heart, it’s a simple point. If people are worried about how far the car will get them, about the infrastructure, about the cost of installing chargers at home, about battery longevity - then they just won’t make the switch. They’ll stick with what they know.
And it’s here that government has a vital role to play. For example, through making vehicles affordable, by joining with business to invest in charge-points across our road networks to ease anxiety about range of travel.
Governments can help design the zero-emission vehicle eco-system that makes the low-emission choice the easy choice.
It’s already started in cities like New York and San Francisco, with their carpooling lanes open to zero-emission vehicles. Or in Shenzhen, with its all-electric bus fleet. Or Milton Keynes’ free parking for electric cars. We want business to be bold in providing the supply. But governments must be bold in fuelling confidence and demand, too. It’s a technological change, but also a cultural change. And business can’t do that alone.
So, in conclusion, yes, these are times of disruption, times of change and transition. But it is in the heart of change that business finds opportunity. Thomas Parker’s company started out making horseshoes. He saw an opportunity to change the world and seized it.
Today we must do the same. It will take collaboration – to pull back from protectionism and reap the benefits of common standards. It will take even-faster innovation – drawing upon our universities and bringing them together globally. And it will take government action – to underpin consumer confidence.
But let me conclude by reflecting on this summit. Because we meet at a moment when the world is asking: what kind of country is the UK? And I think this summit provides the answer.
We’re a country that prizes innovation, that values our ties to the world, that faces the greatest challenges, and turns them into the greatest opportunities.
And what better example is there than the transition to a zero-emission future? We look forward to working with all of you to seize this chance and change our world for the better. Thank you.
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