Vehicle production in the UK fell 15.5% last year as uncertainty over tariffs and the cyber-attack at JLR added to a “tough year for auto”.

Car output dropped 8.0% while CV volumes declined 62.3%, giving a combined 764,715 units, according to the latest figures published today (29 January 2026) by the Society of Motor Manufacturers and Traders (SMMT).

Volumes were constrained by a number of factors, including the hack at JLR, which is Britain’s biggest automotive employer. The new tariffs on trade across the Atlantic, Vauxhall’s consolidation of LCV production at Ellesmere following the Luton plant closure, and general industry restructuring for an electric future also hit output.

December production added to the downturn, with van, truck, bus and coach volumes declining for a ninth consecutive month, falling 67.7% to 2,281 units. However, car production showed signs of recovery, rising 17.7% to 53,003 units in the final month of the year, ending four months of decline.

Over the year, car production for the UK market fell by 8.2% to 161,545 units while exports declined 7.9% to 555,826 units, accounting for 77.5% of output.

Electric vehicle manufacturing bucked the trend though. Production of battery electric (BEV), plug-in hybrid (PHEV) and hybrid (HEV) cars rose by 8.3% to a combined 298,813 units – a record 41.7% share of output.

With the start of next-generation Leaf EV production in Sunderland, and the planned launch of seven new EV models across the UK, output is expected to grow in 2026.

The SMMT said new EV models entering production signals optimism, with the opportunity to produce one million vehicles by 2027 if the conditions were right.

The latest independent production outlook expects overall UK car production to return to growth, with output set to rise by more than 10% to some 790,000 units in 2026. Overall light vehicle production is anticipated to reach 824,000 units – with the potential to reach one million units by 2027 provided new model launches stay on track and the right conditions are set.

The sector also called on the Government to deliver on its new Industrial and Trade Strategies to improve manufacturing competitiveness and unlock growth potential.

Significant public and private investment has already been committed to the UK’s EV transition – with the Government’s £4bn Drive35 programme launched as part of its Modern Industrial Strategy. Achieving the strategy’s ambition of UK automotive production reaching over 1.3 million per year by 2035 now depends on the delivery of the commitments set out.

Mike Hawes, SMMT chief executive, said: “The launch of a raft of new, increasingly electric models and an improving economic outlook in key markets augur well. The key to long-term growth, however, is the creation of the right competitive conditions for investment; reduced energy costs; the avoidance of new trade barriers; and a healthy, sustainable domestic market. Government has set out how it will back the sector with its Industrial and Trade strategies, and 2026 must be a year of delivery.”

Colin Walker, head of transport at the Energy & Climate Intelligence Unit (ECIU), said it was notable that the SMMT’s optimism for a stronger 2026 was based on EVs, with a slew of new models entering production in UK factories this year.

“This goes to show that, with the world moving to EVs, the future of the UK’s car industry rests on it making a successful transition to building them. This has been laid out in stark detail in a report by CBI Economics. It found that a rapid and successful transition to building EVs could see the car industry’s contributions to the UK economy could increase by over £16bn, with 167,000 new jobs being created. Conversely, were the car industry to fail in making this transition, economic output could fall by as much as 73%, or £34.1bn, and over 400,000 jobs could be lost.”

Walker also said government support was critical to achieving success, including the provision of a stable and supportive regulatory environment through keeping measures such as the ZEV mandate in place.

“There are now over 1.8 million EVs on the UK’s roads, increasingly powered by electrons generated by British wind and solar farms. Our charging infrastructure is receiving billions in private investment, while more and more EVs are beginning to roll off British production lines – from the electric Mini in Oxford, to the Nissan Leaf in Sunderland, and the new electric Jags and Land Rovers set to emerge from the West Midlands. The opportunity is there for the UK to cement its status as a frontrunner in making the shift to driving and building the electric cars of the future.”