‘Amid significant geopolitical and trade tensions, UK manufacturers are set on turning billions of pounds of investment into production reality, transforming factories to make new electric vehicles for sale around the world’
New data reveals that a slowdown in the shift towards electric vehicles contributed to a drop in UK car production last year.
The total production was just over 900,000 in 2024, marking a nearly 12% decrease from the previous year, as per the Society of Motor Manufacturers and Traders (SMMT).
There was a 20% reduction in the output of battery electric (BEV), plug-in hybrid (PHEV) and hybrid vehicle (HEV), which the SMMT noted was anticipated. However, these still made up over a third of production, the second highest on record.
Factories produced 779,584 cars and 125,649 commercial vehicles (CVs), totalling 905,233. Car companies announced investments exceeding £20bn in electric vehicle (EV) production in 2023 and an additional £3.5bn in 2024, leading the SMMT to predict that the decline will be temporary.
Chief executive Mike Hawes stated that the industry was still moving in “one direction”, but highlighted the intense competition for investment. He urged for measures to encourage consumers to purchase EVs and for a tariff-free enhanced trade partnership with the EU, which remains the largest market for exports.
Nearly eight out of ten cars were intended for export last year, with 77.5% (467,937 units) being shipped to the top three markets – the EU (54%), US (16.9%) and China (6.6%). Exports to the EU and China fell by 24.3% and 21.8% respectively, while those to the US increased by 38.5%, underscoring the SMMT’s emphasis on the need for favourable trading conditions across the Atlantic.
The SMMT has reported a robust 4% increase in commercial vehicle (CV) production last year, marking the highest surge since 2008. Despite this uptick for CVs, car manufacturing faced headwinds including factories transitioning to electric vehicle (EV) production, softness in international markets, and a hampered shift to electrification due to challenging economic circumstances, stated the SMMT.
December concluded a streak of 10 months of successive downturns for the British car industry, with production plummeting by 27% compared to the same period the previous year.
Mr Hawes acknowledged that the automotive sector endured a “very difficult year”, but he also recognised the potential for job creation as the sector shifts towards areas such as software development. The SMMT praised its open dialogue with the Labour Government and found reason for optimism in the government’s industrial strategy plans.
Mr Hawes remarked on the UK manufacturers’ determination: “Amid significant geopolitical and trade tensions, UK manufacturers are set on turning billions of pounds of investment into production reality, transforming factories to make new electric vehicles for sale around the world.
“Growing pains are inevitable, so the drop in volumes last year is not surprising. With new, exciting models and battery production on the horizon, the potential for growth is clear.”
“Securing this future, however, requires industrial and trade strategies that deliver the competitive conditions essential for growth amidst an increasingly protectionist global environment.’
The most recent independent production forecast anticipates car and light van production to reach approximately 839,000 this year, with a projected increase to 930,000 in 2027. Furthermore, there is potential for production to exceed one million in 2028 and surpass 1.1 million by 2030.
