By Chris McDonald, Minister for Industry in the Department for Energy Security and Net Zero, and the Department for Business and Trade

The Society of Motor Manufacturers and Traders highlighted recently that the emerging autonomous mobility sector could be worth £66 billion by 2040 and that is exactly the kind of high growth, high potential sector that the Government wishes to support through our industrial strategy.

We have a very simple ambition. We want to be the first European market for self-driving vehicles.

We want to use the enabling regulation that we have and targeted research and development funding so companies can reach customers faster, attract capital on better terms and export globally.

The Automated Vehicles Act is one of the ways that we’re doing that and through that legislation, we’re giving developers and investors the certainty they need.

We’re planning full implementation for next year, with a permitting route for automated passenger services going live in the coming months. This will open the door to safe commercial pilots for paying passengers.

Beyond the permitting regime, we’re also keen to create the right conditions for the autonomous vehicle sector to thrive.

We are increasing investment into research and development. In our advanced manufacturing sector plan, we announced our £150 million CAM Pathfinder programme, which runs until 2030.

It focuses on those parts of the supply chain in which the UK leads or could lead with a bit of additional support.

Our priority here is backing investment ready business cases, which can bring in private capital and accelerate commercialization.

We’re seeing strong demand for these Pathfinder competitions. The demonstrator enable calls that closed in December received £74 million of bids against the £35 million that was on offer.

I think that shows the real wealth of firms who want to move from piloting to products. Our Pathfinder programme will help firms do that.

Another focus for me is ensuring that high potential firms can start, scale and stay in the United Kingdom.

We know that investment is extremely competitive, with other economies vying for projects, and acquiring finance for what have traditionally been seen as high-risk projects can be very challenging.

This is why we’re strengthening the investment mandate of the British Business Bank, which has recently invested £25 million in UK autonomous driving company Wayve.

Our national wealth fund also recently made a multi-million commitment to Oxa, an autonomous vehicle software company headquartered in Oxfordshire.

On regulation we’re backing research that gives developers clarity and removes barriers.

In parallel, we are implementing the Automated Vehicles Act and working to expand autonomous technology to other environments.

We’re partnering with the regulatory innovation office to hasten the roll-out of self-driving vehicles in off-road settings and on closed sites.

In our cities and our regions across the country, we’re also keen to champion UK innovation.

In Cambridge, the award-winning Alexander Dennis autonomous electric buses have begun free passenger services linking the city’s park and ride sites to the biomedical campus.

These buses show that autonomy can complement public transport while also supporting our net zero goals.

Earlier this year, Aurrigo, which specialises in transport at international airports, announced its largest ever order for 25 vehicles.

Government, of course, can set the rules of the road to create a business environment. We can invest in infrastructure and skills, but it’s down to industry to design, build and export at scale.

The success of autonomous vehicles is not going to be because of technology problems. The technology problems are eminently solvable.

The barriers will be more about societal acceptance and financing. It’s one thing changing regulations, it’s another thing ensuring that, socially, the general public accepts the technologies, are enthusiastic about them and want to adopt them.

We shouldn’t underestimate how, if the social aspect is not well handled, then you could generate a level of resistance which would then become very difficult to overcome.

We’ve seen issues with this. The hydrogen sector, for instance, has had big problems with this in the past.

However, winning over the public helps to create market acceptance because this is a huge step change.

Autonomous vehicles will be a completely different way of organising and running their lives, and yet is the sort of thing that given a generation it will be completely accepted.

People will wonder how they ever behaved any differently. It will be completely transformational and unleash productivity improvements around the country. We shouldn’t underestimate the impact the technology can have.

Chris McDonald was speaking at the CAM Innovators Day in London