- The UK automotive sector could increase its economy by £16.1 billion by 2035 through rapid EV transition.
- The report predicts a £50 billion gap: a quick BEV transition could create 167,000 jobs by 2035.
- Urgent government incentives and investments are essential for the UK to lead in the global electric vehicle market.
ECIU report shows that the UK EV transition could have a massive economic impact, but warns adoption must increase
The UK automotive sector could add £16.1 billion to the economy by 2035 if it quickly embraces Battery Electric Vehicle (BEV) production, according to a new report. The Energy and Climate Intelligence Unit (ECIU) and CBI Economics highlight that the sector already contributes £46.8 billion annually and supports over 552,000 full-time jobs.
Currently, the UK’s car production is dominated by exports, with 79% of vehicles shipped overseas. In 2023, only 7% of the vehicles produced were BEVs—about 74,700 units. The rest were non-electric vehicles, including hybrids and internal combustion engines. Major export markets include the EU, the US, and China.
The report lays out four possible future scenarios for the industry from 2024 to 2035. If the shift to BEV production speeds up, the sector could boost its economic output by £16.1 billion. But if the transition lags, the industry might see a decline of £34.1 billion. This creates a £50 billion difference between the best and worst outcomes.
Job creation is also at stake. In a rapid BEV transition, the industry could create 167,000 new jobs by 2035. However, a slow shift could result in the loss of up to 404,000 jobs. This report comes at a pivotal time for the UK, as the US just announced a huge funding package for its own automotive sector.
The ECIU stresses that swift action is crucial to stay competitive in the global BEV market.
Colin Walker, head of transport at the ECIU, warns:
“If the UK attempts to stand still on the transition, it risks repeating the mistakes of the 1970s and 1980s, leading to a crash in economic output and jobs lost.
The UK’s car industry has huge strengths and there is enthusiasm to modernise, but the Government will need to create the right conditions with incentives and investments to ensure the UK is at the front of the queue to leverage private capital and make the transition to building the electric cars of the future.”
Dunstan Power, director of electric vehicle charging design consultancy, Versinetic, commented:
“This report highlights the choice the UK faces with EV adoption. We can either stand on the side-lines, and let others develop and prosper from the technology – as has so often been the case historically – or we can embrace the change, become leaders and benefit from the export potential it offers. This is down to the government and investors.
The technology transition is going to happen either way. As experts in EV charger design, we at Versinetic remain committed to playing our part in this transition, ensuring that the UK remains competitive in the global EV market and capitalises on the economic benefits of this automotive revolution.”
The report calls on the government to provide the right incentives and investments to secure the UK’s future in EV production. This comes amid industry-wide calls for further investment in sustainable living. Recently, Secretary of State for Energy Security and Net Zero, Ed Miliband, called for an increase in charging rollout. This was met with some criticism from industry players who commented that the rate of EV adoption was the larger concern.
Investment is key, and as the report shows, it’s an investment that could secure our future.
