- UK car production fell by 7.6% in early 2024 as the industry shifts towards electric vehicles.
- Substantial £23.7 billion investment and factory retooling caused structural changes and a 26.6% production drop in June.
- Despite overall decline, domestic output rose by 17.7%. Future projections expect over 1.1 million light vehicles by 2028.
SMMT reports decline in UK car production, citing preparations to go electric as the cause
UK car production has experienced a notable decline, dropping by 7.6% in the first half of 2024, according to SMMT reports. This dip reflects the industry’s shift toward EVs, as manufacturers adapt their supply chains and processes. EV production also saw a 7.6% fall, amounting to 157,224 units. Zero-emissions vehicles (ZEVs) now comprise 37.8% of the UK’s total car output.
The transition to EVs is driving structural changes in the industry.
An independent production outlook predicts a 9.3% decrease in overall UK car and light van production for 2024, anticipating around 910,000 units. This drop is linked to manufacturers retooling their factories to accommodate EV production, following a substantial £23.7 billion investment announced last year. The shift was especially felt in June, which saw a sharp 26.6% decline due to multiple model changes.
Mike Hawes, SMMT Chief Executive, commented:
“The UK auto industry is moving at pace to build the next generation of electric vehicles – a transition that can be a growth engine for the entire British economy. The new government’s commitments to gigafactories, a decarbonised energy supply and a faster planning system will help boost our competitiveness and sustain employment in a sector that delivers well paid, skilled jobs nationwide. Amid fierce global competition, however, industry and government must work quickly to deliver those commitments, creating an industrial strategy that enables the growth the economy craves.”
Despite the overall decline, domestic car output rose by 17.7% to 106,157 units. However, this increase was not enough to counterbalance a 13.9% fall in export production. The European Union remains the largest market for UK car exports, taking 55.4% of all exports. The US, China, Turkey, and Australia follow, collectively accounting for 29.4% of overseas orders.
However, the future is bright.
The production outlook suggests a recovery, with UK light vehicle production expected to surpass 1.1 million units by 2028, with more than half being ZEVs. By 2035, the UK could produce over nine million zero-emission light vehicles, potentially generating over £290 billion.
The automotive industry stands ready to collaborate with the government. The new Labour government cited the UK automotive sector as “the jewel in our manufacturing crown”. Their support for the sector is set to increase as the new cabinet establishes itself. With manufacturing slowing in favour of re-purposing and re-tooling facilities, the future of UK car production is charging towards emobility.
