UK annual battery electric vehicle (BEV) production could rise 10-fold by 2030 if all political parties get behind a package of measures to support the automotive sector.

The SMMT has called for cross-party adoption of five pledges as part of an industrial strategy to ‘supercharge’ EV production

The Society of Motor Manufacturers and Traders (SMMT) has set out five pledges that it says would dramatically boost BEV production to more than 750,000 units per year by 2030. Worth some £106bn, such BEVs would help drive the economy but would also tackle current vehicle shortages and help net zero goals through a commitment to “deliver green automotive manufacturing growth and consumer choice in a thriving, accessible EV market”.

But such a huge volume rise in EV production is contingent on a competitive business environment – and the SMMT’s ‘Manifesto 2030: Automotive growth for a zero-emission future’ warns that the UK faces fierce global competition as other countries offer huge cash incentives and subsidies to attract green manufacturing.

The threat of tariffs from tougher local content rules under the UK-EU trade deal, which come into force in just six months’ time, are a significant problem too.

Stellantis has already warned that the tougher legislation would impact the sustainability of both its own plants and those of other carmakers, making EV manufacturing in the UK “uncompetitive and unsustainable” and potentially prompting factory closures.

If not addressed, it would make British-built electric vehicles uncompetitive in our biggest export market, while pushing up EV prices for British buyers just as the UK and EU try to accelerate their uptake.

The European Automobile Manufacturers’ Association (ACEA) has also spoken out on the rules in the last week, warning that tariffs could total €4.3bn (£3.7bn), potentially reducing electric vehicle production by some 480,000 units; it’s called for a three-year postponement to the legislation.

Inflationary pressures also pose major problems; more than 80% of companies responding to SMMT’s latest automotive business confidence barometer reported rising input costs, which are limiting profitability and acting as a brake on investment, despite an increase in orders and output.

Energy prices are another issue – and the SMMT has said competitive prices are critical to long-term domestic EV production, with more than nine in 10 firms citing the importance of energy price mitigation measures as essential to further investment. SMMT data indicates that the UK automotive sector faces electricity costs more than double those of EU rivals, with the added challenge of long lead times to secure essential new grid connections for renewable investments.

Other measures seen as important by industry include improved trade support, regulatory certainty and, above all, a healthy EV market – for which lower energy costs, mandated charging infrastructure targets, and financial incentives for buyers, were ranked as the biggest drivers.

The SMMT presented its Manifesto 2030 today (27 June 2023) at its annual Summit.

Chief executive Mike Hawes said: “The Government has set the industry tough targets and we are committed to meeting them. But we are in the middle of the most fiercely competitive investment landscape of a generation and need a UK response, urgently, using every policy, every fiscal and regulatory lever, to make Britain the most attractive place to invest. The automotive industry rises to every challenge, so we set out today a challenge to all political parties: back us with the right conditions and we will turn our obligations into opportunities for our industry, for jobs, for the environment and for the UK.”

The SMMT’s full list of pledges and policy actions in its Manifesto 2030 are online here.