Painful EV transition sees UK car industry set for worst output in over half a century

The UK automotive manufacturing sector is set for its worst output in over half a century, with industry officials citing the “growing pains” of the current transition to electric vehicles and experts warning about the threat of tariffs from President Donald Trump over in America.

The latest figures from the UK’s Society of Motor Manufacturers and Traders (SMMT) show that UK car production fell by almost 14 per cent last year to just 779,584 cars, with the number of light commercial vehicles (LCVs) built rising marginally by four per cent. However, as firms continue to restructure their line-ups to produce more electrified vehicles to meet the UK’s tough ZEV mandate targets, things are expected to get worse before they get better.

Independent projections estimate that the UK will only produce around 775,000 cars in 2025 – mirroring 2022’s performance, and marking the lowest output since 1956. While this reduction can be partially attributed to brands such as JLR and Rolls–Royce focusing on low-production, high-priced bespoke vehicles, adding insult to injury is the closure of Vauxhall’s Luton manufacturing plant – which will have a severe impact on the production of LCVs, with the number built expected to fall to just 64,000.

Of course, Vauxhall’s decision to shut down its historic Bedfordshire facility isn’t the only hit the UK manufacturing industry has taken in the past year. Ford and Lotus cut as many as 1,000 jobs here combined, while Nissan threatened an “irreversible impact” on the UK manufacturing sector unless the Government slackens its ZEV mandate requirements – something the industry estimates it has thus far spent over £4 billion trying to meet.

When Auto Express asked SMMT chairman Mike Hawes if Chancellor Rachel Reeves’ negative rhetoric has had an impact in terms of investment within the UK manufacturing sector, he replied: “I don’t think investors pay much attention to narratives. It’s more about whether you have the right policies in place. Is it attractive?”

Nonetheless, Hawes added: “Securing [the] future requires industrial and trade strategies that deliver the competitive conditions essential for growth amidst an increasingly protectionist global environment.”

Roughly eight-in-10 vehicles manufactured in the UK are exported, with over half going to Europe and just under 17 per cent heading across the Atlantic to the US. Exports to the States rose by a promising 38.5% in 2024, but with President Trump threatening huge tariffs on foreign imports in order to boost America’s own economy, there are concerns that this could stifle one of the few signs of growth in the sector.

Speaking to Auto Express, Professor of Business Economics at Birmingham University, David Bailey, said Trump’s threat of flat 20 per cent tariffs “would be a sizeable hit for UK manufacturing, impacting most on high-value sectors such as automotive”. Bailey warned that this could result in exports falling by up to £22 billion across all sectors, with the US being “particularly important for the UK’s premium and luxury auto producers”

There could be some light at the end of the tunnel, however; Reeves has already begun switching up her negative rhetoric in a push for UK economic growth, including an injection of cash for on-street public chargers and the metal manufacturing industry, which supports the production of EVs. 

Furthermore, AutoAnalysis, the analytics firm that produced the SMMT’s projections for 2025, predicts that production output for cars and LCVs could see a vast increase to more than one million units by 2028. However, only time will tell whether such a figure becomes reality, given that the UK’s car manufacturing industry has generally been on a downward trend since Brexit in 2016.

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