News
According to the latest report from the Society of Motor Manufacturers and Traders (SMMT), the UK automotive industry could deliver a £4.6 billion injection to the UK economy by 2030.
The uplift is driven by the UK’s commitment to ban the sale of all new petrol vehicles by 2035, a decision that is pushing automotive manufacturers towards electric vehicles with prescriptive rule of origin laws. Much like EU content laws, the UK government will offer preferential trade conditions for cars that exceed a threshold for UK or EU manufactured content.
The SMMT forecasts that this strategy will increase demand for UK-made parts by 80% by 2030, providing considerable opportunities for investment and a healthy boost to domestic supply chains.
Demand for battery electric vehicles (BEVS) is projected to more than double by 2028, accelerating demand for electric components including electric motors and drive systems. Domestically produced battery technology, from battery packs to casings and thermal management systems, is expected to increase by as much as 300% by 2030.
However, according to a report from global consultancy firm Deloitte, costs and a lack of charging infrastructure continue to threaten this predicted growth. In its Q4 2025 automotive report, Deloitte stated:
“Market analysis suggests that investment into charging may be slowing, leaving a crucial gap in the development of infrastructure needed to boost EV uptake. Continued investment and development in charging infrastructure, along with greater clarity for both consumers and manufacturers, will be crucial in driving further uptake”.
Despite these infrastructure gaps, the SMMT remains optimistic in its predictions, aiming to return the UK automotive industry to an output of 1.3 million vehicles by 2035.
While this growth is predominantly driven by the UK’s expanding EV sector, traditional combustion engines and plug-in hybrids continue to make up a significant portion of British production.
More recently, autonomous vehicles have come to represent part of the domestic manufacturing patchwork, a sector projected to reach £24 billion by 2040. This acceleration is supported by government initiative such as the CAM Pathfinders Programme, which provides £150 million in funding to autonomous projects across the UK. Additionally, the emergence of autonomous robotaxi pilots in London, led by providers including Waymo and Wayve, is driving growth in the sector.
SMMT Chief Executive Mike Hawes outlined this protectionist approach. He said:
“The UK automotive sector is transforming at pace, and for companies looking to invest in Britain the opportunities are clear. We have the skills, the innovation and the industrial base built on the billions already invested into Britian by global brands. With a modern, long term industrial strategy – with automotive at its heart – the UK is a safe and stable destination for automotive investment amidst fierce global competition, increasing protectionism and geopolitical upheaval.”
This projected uplift comes at a time when many global policymakers are seeking to localise production. Trump’s milieu of import tariffs has incentivised domestic production in the US across most major industries, including automotive, agriculture and defence.
Similarly, the EU has implemented its own “Made in Europe” content laws, which provide preferential trade treatment for cars that meet the 70% quota for EU-made components.
UK manufacturers are increasingly looking for ways to make domestic supply chains more competitive in the face of destabilising global conflict and increasingly price-competitive Chinese rivals.
Keep up-to-date with the latest mobility news by subscribing to MOVEMNT’s free newsletter
