Automakers Rank Second Globally in R&D Spending, Report Finds
A trade group report shows global automakers and suppliers invest over $115 billion yearly in R&D, trailing only the pharmaceutical industry and outpacing technology and energy sectors.
Automakers and their suppliers have become the world’s second largest investors in research and development, according to a report from the American Automotive Policy Council (AAPC). The sector now spends more than $115 billion each year on R&D, with only the pharmaceutical industry investing more globally.
The AAPC report highlights that automotive R&D accounts for around 16 percent of the world’s total research and development investment, putting it ahead of hardware, software, electronics, and oil and gas industries. In the United States alone, automakers invested nearly $20 billion in R&D over the most recent year surveyed. General Motors, Ford and Fiat Chrysler (now Stellantis) were responsible for $18.7 billion of that total, which the AAPC notes is nearly double the annual R&D budget of NASA.
This level of investment has a direct impact on employment within the sector. The US auto industry, including suppliers, now employs close to 10 percent of all private-sector engineers and scientists in the country. The scale of R&D activity is also reflected in the volume of intellectual property generated: automakers, suppliers and related entrepreneurs file for nearly 60,000 patents worldwide each year. Patent filings in the fields of autonomous and hybrid vehicles have risen by almost 300 percent over the past decade, according to the report.
Automotive R&D outpaces tech and energy sectors
The report draws attention to the fact that the combined R&D investment by GM, Ford and Fiat Chrysler outstrips that of major technology and energy companies such as Facebook, HP, Dow and ExxonMobil. This reflects the rapid pace of technological change in the automotive sector, driven by competition in areas such as electrification, safety systems, connectivity and autonomous driving.
