EV investment nears peak

The world’s top 20 car manufacturers spent £71.7bn on research and development (R&D) in 2019/20 as the rush towards electrification gathered pace.

This is according to research carried out by accountancy and business advisory firm BDO LLP.

It found the top 20 manufacturers have collectively invested £341bn in R&D over the past five years, but the amount invested in the last year is the second highest on record, behind the £71.9bn invested the year before.

However, the research suggest manufacturers are now beginning to scale back investments. That is because off-the-shelf components for electric vehicles have now become more readily available, enabling manufacturers to buy them from suppliers rather than develop them in-house, while many are also backing away from investment in combustion engine technology as environmental deadlines banning the sale of petrol and diesel cars approach.

Richard Austin, national head of manufacturing at BDO said: “These figures suggest that many carmakers have scaled the R&D mountain they had to climb in order to develop a full range of electric vehicles. Multiple manufacturers now offer a growing range of vehicles designed from the ground up as fully electric. Very soon every manufacturer will.”

A breakdown of the research carried out by BDO found that Tesla alone invested £1.1bn in R&D last year, a 10% increase on the previous year, although that is still just 10% of the biggest-spending carmaker, which invested £12.4bn in R&D last year, while the US and Japan increased investment and Europe and China decreased investment.

Investment in the US grew from £12.6bn to £12.62bn, while Japan saw investment rise from £20.23bn to £20.37bn.

Within Europe though, further investment in EV technology in France and Italy was offset but cuts made by German manufacturers.

Austin said: “The fall in R&D spend in Germany is a reflection of German automotive manufacturers investing heavily and early in response to the changing marketplace. Manufacturers in some other countries are still investing to catch up.”