The UK automotive sector saw production fall below one million units last year as it navigates the transition to electric vehicles, according to industry data released Thursday.

The Society of Motor Manufacturers and Traders (SMMT) also warned of potential trade disruptions due to US President Donald Trump’s stance on tariffs.

Production decline and shift to EVs

Factories in the UK, which primarily manufacture vehicles for foreign-owned brands such as Nissan and Jaguar Land Rover, produced a total of 905,233 vehicles in 2024—an 11.8% drop from the previous year. The SMMT attributed the decline to several factors, including the discontinuation of older models, retooling for electric vehicle (EV) production, weak global demand, and economic uncertainty slowing the shift to electrification.

The industry body forecasted a further decline in output to 839,000 vehicles in 2025, with a return to production levels above one million units anticipated by 2028. However, this recovery hinges on favorable economic conditions, rising consumer confidence, and continued investment in zero-emission vehicles.

Despite the production downturn, the UK remained a key exporter, with nearly 80% of vehicles manufactured last year shipped abroad, predominantly to the European Union. Meanwhile, production of battery electric, plug-in hybrid, and hybrid vehicles collectively fell by over 20%, though they still comprised more than a third of total output.

Concerns over US trade policies

SMMT Chief Executive Mike Hawes emphasized the importance of industrial and trade strategies in maintaining competitiveness amid rising global protectionism. While he acknowledged the UK’s potential for growth in EV and battery production, he expressed concerns over the potential impact of Trump’s trade policies.

Following his inauguration, Trump swiftly issued an executive order on “Unleashing American Energy,” aiming to level the playing field for gasoline-powered vehicles while halting federal support for new EV charging infrastructure. This move signaled his administration’s shift away from promoting electric vehicles.

Hawes warned that escalating trade tensions and potential tariffs could disrupt the UK car sector, particularly for luxury brands such as Bentley and Rolls-Royce, which rely on the US market. While these high-end manufacturers may have a greater ability to absorb tariff costs, Hawes stressed that avoiding such trade barriers would be preferable for the industry.

With the UK car sector already facing significant challenges in adapting to the EV transition, Trump’s tariff policies add another layer of uncertainty to the industry’s future. Photo by UK car industry, Wikimedia commons.