Navigating the road ahead: demand-led innovation for materials in the automotive sector
The aim of the report was to explore how demand-led innovation interventions could support supply chain collaboration between foundation industry material producers and their downstream automotive end-users.
The why
The UK’s foundation industries are intricately linked with the automotive sector, as both rely heavily on each other, with the automotive sector being a key consumer of materials like metals, glass, plastics, and composites. Beyond being a major economic contributor and employer, the automotive industry drives innovation in materials, manufacturing and product design. To remain globally competitive, UK automotive manufacturers demand materials that meet stringent standards for performance, durability, and sustainability, which spurs research and development within foundation industries.
Moreover, the automotive sector’s focus on environmental sustainability amplifies the need for materials with lower carbon footprints and improved recyclability.
We are now only one industrial investment cycle away from 2050, by which time the UK’s foundation industries should have reduced their emissions by at least 90%. By knowing the market opportunities and threats, potential impact of disruptive materials and/or business models, these materials producers can respond (with the support of the OEMS), to the short and medium-term R&D efforts needed to help meet their downstream customer demands.
Drivers behind the demand
As consumer preferences evolve and regulatory landscapes shift, the demand for innovative solutions in both vehicle design and materials sourcing means that the automotive sector must respond. These demands could translate to increased fuel efficiency, lighter vehicles, meeting environmental regulations and sustainability targets – all alongside delivering the best value to customers. The drive towards electrification in the automotive sector means that new components and materials have already and will continue to enter the product life cycle.
Ricardo gathered evidence for the existing and future demand for foundation industry materials used in UK automotive manufacturing. The evidence and analysis considered the following:
- Material share of vehicle weight
- Currently reported domestic material production and volumes
- The UK’s influence on the material’s supply chain
- Key export markets
- Innovation potential
- Material sustainability credentials
The resulting shortlist contained six groups of materials: cast iron and steel, aluminium, plastics, polymers and composites, copper, and glass.
Key findings so far
Four key findings and cross-cutting trends were identified to run through each of these materials, shedding light on the industry’s trajectory and future strategies:
- Mass Reduction and Lightweight Materials: Manufacturers continue to prioritise mass reduction in vehicles, driving demand for lightweight alternatives such as high-strength steels, aluminium, and composites. Achieving scale in sustainable production is essential for widespread adoption, emphasising the need for support in integrating these materials into mass-produced vehicles.
- Closed-Loop Supply Chains: The pursuit of closed-loop supply chains is gaining momentum as manufacturers seek to reduce the sustainability impacts of automotive materials. This is driving demand towards suppliers with materials that contain increased amounts of recycled content, and towards materials that have high recyclable potential.
- Low or Zero-Carbon Energy: With the rise of electric vehicles, the importance of reducing production emissions is paramount. This is driving demand towards suppliers that can evidence full use of renewable energy in their production processes.
- Consumer Expectations and Incentives: Ultimately, manufacturers are driven by consumer expectations and profitability. Material innovations must be cost-effective and aligned with consumer perceptions of value. Regulatory policies must evolve to keep pace with innovation, ensuring that emerging technologies are viable for mass adoption.
Modelling the future
As part of the study, Ricardo built upon prior modelling activities for the UK Government (DfT) and the European Commission (DG CLIMA) to project the demand for materials in the automotive sector up to 2050. Alongside a business-as-usual scenario, Ricardo explored a more ambitious scenario based on the projected increase in demand and assuming greater levels of innovation, material mass reduction and increased sustainability of material supply.
Under these assumptions, two major trends were evident:
- Total demand across all automotive materials flattens after 2035 (by mass)
This trend is driven by the pursuit of material resource efficiency but countered by a general shift towards larger vehicles e.g. SUVs. - The composition of materials demanded by the automotive sector will change
The road ahead
As the automotive sector continues to evolve, so too must our approach to demand-led innovation. Collaboration between the automotive sector and foundation industries is crucial for meeting market demands, achieving regulatory compliance, and ensuring the UK remains a hub for innovation and manufacturing excellence. By leveraging insights from ongoing research initiatives and engaging stakeholders across the value chain, we can chart a course towards a more sustainable and resilient future.
– Neelam Mughal, Knowledge Transfer Manager – Advanced Materials
Continue the discussion
Your insights are invaluable for shaping a sustainable automotive future. To comment on the report findings or discuss the study further, contact: automotive.innovation@ricardo.com. Let’s drive change together.
Keep up to date with our other work in this area:
- Market driven decarbonisation: the role of demand-led innovation in supporting emission reductions in foundation industries by the Cambridge Institute for Sustainability Leadership
- Demand led innovation scoping study: construction products by constructing excellence on behalf of BRE
- Demand-led Innovation Scoping Study: Future innovations in the packaging industry
