Written submission from Wrightbus (ELG0010)

Wrightbus welcomes the opportunity to submit evidence to the Business and Trade Committee on export-led growth.

Our key points

• Hydrogen technology, such as buses (which have a large domestic supply chain), offer the UK a unique opportunity for exports.
• To maximise this opportunity, the UK Government should accelerate the domestic roll-out of use of hydrogen technology to help manufacturers scale-up and bring down costs.
• Battery vehicle technology, the other option to hydrogen, is a more mature market and already significantly dominated by China (who control roughly 75% of the supply chain of key battery technology minerals).

Our context

Wrightbus is a zero-emission bus manufacturer, based in Ballymena, Northern Ireland. In 2019, we were acquired by Jo Bamford and since then our workforce has grown from 56 to over 1,000 today.

We have achieved growth due to our zero emission buses being among the first, and best, products on the market:

• We are the first manufacturer anywhere to be able to offer to customers the full set of zero emission buses (single and double deck, battery electric and hydrogen fuel cell).
• Our hydrogen double deck bus (which includes parts from over 40 UK areas) was the first to enter service in the world, and there are now more than 100 in operation in London, Birmingham, Aberdeen, Belfast, Dublin and Brighton. We are also exporting these buses to Europe and Australia.
• Our electric double deck bus has been independently verified as the world’s most efficient in its class.

Of particular importance for this inquiry:

• We have recently signed export agreements to sell hydrogen buses to customers in Germany and Australia – a first ever for Wrightbus.
• In June 2023, UK Export Finance provided Wrightbus with £50 million in financing to support our export strategy[i].

Response to committee questions

What are the new or growing opportunities for exports which can drive UK economic growth? How can these be exploited?

1. Wrightbus believes that zero emission bus technology, and specifically hydrogen fuel cell bus technology, is a new and sizeable export opportunity.

• The global bus market is worth around $21billion, and there are around 3 million buses used for public transport.
• To meet global net zero goals, all, or at least, the vast majority of all buses will need to be switched to zero emission alternatives by 2050.
• The average lifespan of a bus is around 15 years. This means bus operators and local authorities are making investments now in the decarbonisation of their fleets.
• According to projections, the global sale of zero emission bus is due to rise from 112,000 in 2022, to 670,000 in 2027.
• As a result, there exists today a major export opportunity for UK bus manufacturers to sell our zero emission buses into a growing global market.

2. In terms of how this opportunity can be exploited, analysis of this market has led Wrightbus to believe that hydrogen buses offer a particular export opportunity for the UK.

3. The clearest reason for this is that China currently makes over 90% of the world’s electric buses and dominates around 75% of the rare earth minerals that go into battery production. This means it will be extremely difficult for the UK to scale-up up battery bus production to a point where we can out-compete Chinese manufacturers. The race to dominate the global electric bus market has been won already – but the global race on hydrogen buses is only just starting.

4. Hydrogen buses will play a role alongside battery electric buses in the decarbonisation of public transport, and are particularly well suited to areas that have long bus routes, are hilly or struggle to supply enough electricity to a depot to charge a large fleet of battery buses.

What opportunities are there for the UK to become a key supply chain partner to the United States, European Union and other democratic allies? What needs to be done to secure those partnerships?

5. The global bus manufacturing industry is parochial, with many countries having a domestic bus manufacturer. There are a few bus manufacturers that export globally, though some Chinese brands – such as Yutong - are beginning to achieve this.

6. The traditional structure of the bus industry means that there are significant opportunities for UK suppliers to export parts to foreign bus builders. The majority of parts in a Wrightbus hydrogen bus come from UK suppliers, and these are spread out across around 40 areas of the country.

7. By building more hydrogen buses in the UK, we can support these suppliers to position themselves to become key supply chain partners to the US, EU and other democratic allies.

Our recommendations

8. Wrightbus recommends the Government take the following steps to help UK bus manufacturers scale up the manufacture of hydrogen buses, bring down costs and help open up more export opportunities.

• DfT must back several large-scale hydrogen bus projects to progress: In order for the UK to pull ahead of other nations in the manufacture of hydrogen buses, we need to progress some large-scale projects. There are several Combined Authorities and councils that want to introduce large fleets of UK-made hydrogen buses to decarbonise local public transport.

• HMT, DBT and DfT must ensure ZEBRA funding only goes to UK manufacturers: The DfT is supporting councils to buy zero emission buses through the Zero Emission Bus Regional Area (ZEBRA) fund, which has £205m allocated to be spent in this Spending Review. The next round of ZEBRA funding should permit orders only from the three UK manufacturers of zero emission buses to ensure we maximise the potential to further build up local supply chains and expertise, In the first ZEBRA funding round, some councils used their funding to buy buses made in China and Egypt, despite Prime Minister Boris Johnson promising the funds will be for “British-built” buses.
• Utilise UK zero-emission buses in trade trips: UK zero emission buses could be used to help transport delegates and provide vital marketing opportunities. The UK Government has previously used a Mini with a Union Jack roof during trade trips, and we believe this concept could evolve to feature to promote our domestic bus manufacturers.