UK auto output slumps below one million as EV transition hits production

Britain’s vehicle production slipped to a five-year low in 2024, falling 11.8% to 905,233 units amid a turbulent shift to electric vehicles and faltering global demand.

UK car and commercial vehicle production fell below one million units last year, according to new figures from the Society of Motor Manufacturers and Traders (SMMT), highlighting the growing pressures on the automotive sector amid its shift to electrification, Caliber.Az reports.

The sharp decline, driven by a 13.9% drop in car manufacturing, reflects the strain on the automotive sector as it retools for a zero-emission future and battles economic headwinds.

Factories produced 905,233 vehicles in 2024, marking an 11.8% year-on-year decline. Car output fell to 779,584 units, down 13.9%, while commercial vehicle manufacturing rose 4.0% to 125,649 units—its highest level since 2008.

The downturn in car production was fuelled by a combination of factors, including the phasing out of long-running internal combustion engine models, a retooling of plants for electric vehicle (EV) production, sluggish demand in key export markets, and a broader economic slowdown affecting consumer confidence.

December capped a bleak year for carmakers, rounding off ten consecutive months of contraction. Output in the final month slumped 27.1% to 45,022 units.

Despite nearly 78% of cars produced in the UK being exported in 2024, international demand faltered. Shipments to the EU and China dropped 24.3% and 21.8% respectively, though exports to the US surged 38.5%. The EU, US, and China remained the UK’s top export destinations, followed by Türkiye and Japan.

Electrified vehicle production also declined, with battery electric (BEV), plug-in hybrid (PHEV) and hybrid (HEV) volumes falling 20.4% to 275,896 units. Still, these vehicles accounted for over a third of total output, reflecting continued investment in green mobility. The fall was largely anticipated, given the scale of restructuring across the industry and temporary disruptions as plants are refitted for future EV models.

With more than £23.5 billion (approx. $30 billion) pledged since the start of 2023 to support the UK’s EV transition, the industry remains optimistic. An independent outlook forecasts car and light van production to rebound to 839,000 units in 2025 and potentially surpass one million units by 2028, climbing to over 1.1 million by 2030—provided economic conditions stabilise and consumer uptake of EVs accelerates.

To meet these projections, the SMMT has urged the UK government to fast-track a dedicated industrial strategy for advanced automotive manufacturing. This includes targeted support for innovation, investment, and skills, as well as measures to boost domestic demand and ensure favourable trade conditions post-Brexit.

The industry is also calling for trade deals that secure tariff-free access to major markets, and agreements on critical minerals vital to EV production. Aligning fiscal incentives with net zero ambitions will be crucial to stimulate demand and maintain the UK’s global competitiveness in a sector worth over £100 billion (approx. $127 billion) in annual trade.

Without swift policy action, manufacturers warn that the UK risks losing momentum in the global EV race—jeopardising future growth, jobs, and climate goals.

By Aghakazim Guliyev