CEO Update

2023 was a winning year and 2024 could be equally bright

22 December 2023 #CEO Update

Yesterday’s landmark UK-EU resolution to defer unattainable rules of origin for electric vehicles may have come at the eleventh hour, but it is a much anticipated Christmas present. In a unanimous vote for common sense, the agreement will ensure EVs avoid tariffs next year and follows a lengthy campaign by SMMT, our EU counterparts and respective members. It’s a win for everyone, safeguarding the competitiveness of the Anglo-European automotive industry, supporting consumers and preventing an unnecessary roadblock to road transport carbon reduction. Critically, it gives the battery industry essential time to catch up with demand – and that must now be the focus.

Wednesday’s publication of government’s new strategy to help secure the supply of critical minerals and promote their sustainable use, therefore, was timely, and SMMT was pleased to contribute to its development. This work will help position the UK as a go-to destination for automotive investment in a fiercely competitive global environment.

2024 will bring its own unique challenges, including the start of the Vehicle Emissions Trading Scheme – formerly known as the Zero Emission Vehicle Mandate – which imposes the most ambitious transition timeline of any major market. SMMT was successful in securing provisions that reflect our sector’s diversity and market uncertainties but, with the end-of-sale date rolled back to 2035, the need to stimulate demand, particularly in the private retail market, is paramount. Securing incentives to activate this market is a New Year’s resolution.

But after such a significant year, we should take a moment to reflect. The last few months have seen the industry mount a remarkable recovery that few would have bet on a year ago. Supply chain turbulence has receded, boosting manufacturing and markets – indeed, November’s production figures put the UK on course to make around a million light vehicles this year.

Meanwhile, billions of pounds of private and government investment have been committed to some headline-grabbing facilities, helping reset the industry narrative and putting the UK back on the automotive map.

So we can reflect on a year which has seen considerable successes. Challenges remain, however, as competitiveness and confidence are fragile things.

But for the present, and with the festive season upon us, I hope you have the time for a relaxing break and wish all of you a happy and successful 2024. Update will return on Friday 5 January.

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