The UK automotive industry has unveiled an ambitious 10-point plan designed to reestablish the country as one of the world’s top 15 vehicle manufacturing hubs by 2030.
The plan was developed in response to the recently launched industrial strategy by the government and outlines how targeted reforms and investments for the UK economy will generate £500 billion over the next decade.
This new commitment is in parallel with the release of a new report by the Association of Auto Manufacturers and Traders (SMMT), entitled “Competitiveness: Promoting Long-Term UK Auto Growth.”
This document highlights the potential and ongoing challenges of the sector and is supported by insights from the Barometer of the UK’s first auto business leader.
SMMT CEO Mike Hawes commented: “The government’s long-term industrial strategy, including Drive £35£25bn auto capital and R&D fund, recognizes automobiles as a pillar of advanced manufacturing.
“Now we must make the most of that position and introduce the right conditions for growth.”
A strong foundation, but rising costs
According to a report by SMMT, the UK auto sector stands on a platform for innovation and investment preparation.
More than half of the companies surveyed have been secured or are planning new investments. However, this optimism is eased by financial pressure. 73.5% of CEOs reported an increase in operating costs, while 46.9% experienced a decline in profits over the past year.
High power costs are a central issue. British automakers pay more than twice the average of Europe, which pays six times more taxes than competing countries’ taxes. In 2024 alone, this added over £200 million to the sector’s energy bill.
The rapid reforms promised in the industrial strategy, particularly industrial energy costs, could reduce these electricity bills by up to 20%. However, the current proposal to facilitate standing fees applies only to battery production.
SMMT is urging the government to extend these benefits across automotive manufacturing, particularly as EV production becomes the industry standard.
Transition of EVs at risk without urgent market intervention
The UK’s transition to electric vehicles (EVs) is another focus. Manufacturers have spent £6.5 billion on EV incentives over the past 18 months, stimulating demand that is far behind government obligations.
More than half (52%) of motor vehicle leaders believe the UK is significantly on track to meet the ban on new internal combustion engine vehicles in 2030.
In addition to tension, new tax rules such as Vehicle Excise Tax (VED) expensive auto supplements effectively punished electric vehicles, and from April 2025 there was an estimated £360 million hit on EV buyers.
To revise the course, the industry is seeking bold consumer-focused measures. It’s a recovery of EC fixes, VAT reductions for new EVs and public charging, meaningful incentives to promote mass adoption. Without such intervention, the EV market will risk stagnation.
Global Trade Reset brings you updated hope
Despite domestic hurdles, recent diplomatic victories offer faint hope for the UK automotive industry.
A new economic agreement with the US will eliminate tariffs that threaten the industry’s profitability, and trade negotiations with India and exhilarating relationships with the EU will create a stronger global platform for UK automobile exports.
Combined with domestic reforms on energy prices, capital allowances, labor skills and regulatory efficiency, these trade developments could revive the UK’s competitiveness. Unlock new investments, create jobs and support the country’s net zero ambitions.
10-point plan to accelerate automobile growth
To turn this possibility into reality, SMMT has outlined 10 strategic recommendations as part of its growth blueprint.
Start a robust consumer incentive scheme for electric and low-emission vehicles. Working with the industry, we will publish a clear decarbonization roadmap for rugged transportation. Ensuring universal access to EV charging by mandating infrastructure rollouts nationwide. The UK positions itself as the biggest investment destination, led by an active office for investment. Reduce industrial energy costs and work with global competitors. Increase supply chain funding to mitigate investment risks and increase competitiveness. Submit apprentice collection funds for a wider range of workforce training initiatives free of charge. Restructure EU-UK trade relations to protect and expand the interests of shared automobiles. We will leverage UK and US economic prosperity transactions to maximize export opportunities. Automotive-focused trade transactions will negotiate with both new and existing global partners.
Intersection Sector
The UK automotive industry is at a critical time. With proper support and policy alignment, it has the capacity to bring enormous economic and environmental benefits to regain its global status, create thousands of jobs and promote the UK’s green transition.
But urgent action is needed to address cost imbalances, restore consumer confidence, and maximize the potential of one of the UK’s most innovative industries.
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