Department for Business and Trade, Automotive Innovation Grants

This Department for Business and Trade, Automotive Innovation Grants is a £1.54b scheme to support the UK’s transition away from internal combustion engine vehicle production and towards zero emission vehicle production. It will provide capital grants of between £1m – £100m, with an intervention rate of up to 25% for each subsidy.

This Scheme follows on from the previous Automotive Transformation Fund, but with an expanded remit and technology scope.

Our key takeaways from the Subsidy Advice Unit (SAU) report are:

• Assessment should clearly explain the importance of the identified market failure in driving the policy objective of the scheme.
• For the equity rationale, Assessment should evidence how investment will be delivered in disadvantaged areas to achieve a policy objective.
• Assessment should systematically set out what alternatives to subsidy were considered (including how they were evaluated and rejected).
• Evidence and explanation on the monitoring and evaluation arrangements which will be in place for individual subsidies should be detailed.
• The Assessment should explain how the impacts on competition and investment in the UK will be assessed within the subsidy award process. Information should also be provided on the weight placed on these impacts in taking decisions to award specific subsidies.
• Assessment should identify the main product markets in the relevant supply chain, which are most likely to be impacted by the Scheme. Following this a competition assessment should be undertaken at a business level, within clearly defined geographic and product markets.
• The balancing exercise should ensure that only those benefits which relate to the specific policy objective are considered.

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