The UK auto industry is undergoing a transformative period, marked by a significant push towards increasing electric car production.
Recent figures from the Society of Motor Manufacturers and Traders (SMMT) reveal a 7.6 % decline in car production during the first half of the year, with factories producing 416,074 units, 34,094 fewer than the same period last year.
This drop is primarily attributed to manufacturers retooling production lines to accommodate electrified models, reflecting the substantial £23.7bn investment made in the sector last year.
The UK’s transition to electric vehicles
Despite the decline in overall production, the focus on electric vehicle manufacturing remains strong.
In the first half of the year, electrified vehicle production, including battery electric, plug-in hybrid, and hybrid models, also fell by 7.6%, mirroring the overall trend.
However, these vehicles still constitute a significant portion of the output, representing 37.8% of total production, unchanged from the previous year.
Export challenges and domestic gains
While domestic car output for the UK market saw a 17.7% increase, reaching 106,157 units, it was insufficient to counterbalance a 13.9% drop in exports.
The export market is crucial for the UK, with more than 70% of cars produced destined for overseas markets.
The European Union remains the largest market, accounting for 55.4% of all exports in the first half of the year, equivalent to 171,745 units.
Other significant markets include the US, China, Turkey, and Australia, which collectively account for 29.4% of exports.
Industry calls for increased government support
Mike Hawes, SMMT Chief Executive, highlighted the rapid pace of the UK’s transition to electric vehicles, describing it as a potential growth engine for the British economy.
He emphasised the importance of government commitments to gigafactories, decarbonised energy supplies, and a streamlined planning system.
These measures are critical to enhancing competitiveness and sustaining jobs in the sector.
The industry’s outlook suggests a 9.3% decline in light vehicle production this year, with a recovery to over 1.1 million units by 2028, more than half of which will be zero-emission vehicles.
SMMT says that by 2035, with the proper government support, the UK could have cumulatively produced over nine million zero-emission vehicles – 600,000 more than previously anticipated and generating over £290bn in value.
Vision 2035
SMMT’s “Vision 2035: Ready to Grow” outlines a strategic plan to develop the domestic EV market, transform the industry, reskill the workforce, provide clean energy, and ensure free and fair global trade.
This vision aligns with the government’s new industrial strategy and Automotive Sector Plan, aiming to secure the long-term success of the UK auto industry and its vital contributions to the economy.
The UK is making significant strides in increasing electric car production despite current challenges.
Through strategic investments, government support, and a focus on innovation and sustainability, the UK is poised to become a leader in the global transition to electric vehicles, ensuring economic growth and environmental benefits for the future.
