UK Vehicle Output Falls Amid EV Shift and Market Strain
UK automotive manufacturing recorded a sharp decline in 2024, as the industry navigated a complex transition from internal combustion engine (ICE) production to electric vehicle (EV) manufacturing under challenging economic and trade conditions. Data from the Society of Motor Manufacturers and Traders (SMMT) showed total vehicle output at 905,233 units, down 11.8% from 2023. Car production fell to 779,584 units, a 13.9% drop, while commercial vehicle (CV) production rose 4.0% to 125,649 units, marking its strongest performance since 2008.
The drop in car volumes was driven by several factors: the end of production for long-running models as plants retooled for EV assembly, weakness in key export markets, and a slowdown in electrification uptake amid economic headwinds. December capped ten consecutive months of decline, with car output down 27.1% year-on-year to 45,022 units. Output for the domestic market fell 8.0% to 176,019 units, while exports dropped 15.5% to 603,565 units.
Exports remain the backbone of UK car manufacturing, with 77.5% of production shipped abroad. The European Union accounted for 54.0% of exports, followed by the United States at 16.9% and China at 6.6%. Shipments to the EU and China contracted by 24.3% and 21.8% respectively, but exports to the US surged 38.5%, underscoring the importance of stable transatlantic trade relations. Turkey and Japan rounded out the top five destinations, with Australia, Canada, South Korea, UAE, and Israel also key markets.
Electrified vehicle output—covering battery electric (BEV), plug-in hybrid (PHEV), and hybrid (HEV) models—fell 20.4% to 275,896 units. Despite the decline, these technologies still represented 35.4% of total production, the second-highest share on record. This contraction was anticipated, given the extensive factory conversions underway to accommodate new EV platforms. Industry investment remains substantial, with more than £20 billion committed in 2023 and an additional £3.5 billion in 2024 to accelerate the EV transition.
Mike Hawes, SMMT Chief Executive, noted, “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.”
Independent forecasts from AutoAnalysis project UK car and light van production at around 839,000 units in 2025, rising to 930,000 in 2027, with potential to exceed one million units in 2028 and surpass 1.1 million by 2030. Achieving these targets depends on improving global demand, sustaining economic stability, bolstering consumer confidence, and ensuring zero-emission model launches proceed without disruption.
The sector’s ambitions hinge on a robust industrial strategy that places advanced automotive manufacturing at its core, fostering innovation, attracting investment, and supporting a highly skilled workforce. A strong domestic market is equally critical, as manufacturers often produce close to where vehicles are sold. Overseas demand, particularly for electrified models, must be reinforced through market regulation that aligns with real-world consumer behavior and fiscal policies that incentivize adoption.
Trade policy remains a decisive factor. The industry advocates for maintaining a tariff-free enhanced trade partnership with the EU, alongside balanced, commercially meaningful agreements with both established and emerging partners. Securing critical mineral supply chains is also essential to underpin battery production and sustain competitiveness.
With the right conditions, the UK automotive sector could consolidate its position as a £100 billion global trade hub, generating up to £50 billion in domestic growth over the next decade while advancing environmental and societal objectives.
