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Back Automotive and reap £50bn growth

25 June 2024 #Electric & Alternatively-Fuelled Vehicles #Event News #SMMT News
  • New analysis shows UK automotive sector can fuel £50 billion of green growth over next decade – with the right conditions in place.
  • Smart policies and consumer incentives would help 17 million drivers switch to zero emission motoring by 2035, halving the number of fossil fuel cars in use.
  • UK light vehicle manufacturing could deliver more than a million EVs a year by 2035, growing sector’s value by 5% on current outlook.
  • SMMT’s Vision 2035: Ready to Grow signposts how sector can be the engine of job creation and carbon cutting while delivering a fair transition for all.

The Society of Motor Manufacturers and Traders (SMMT) is calling on the next government to work in partnership with the automotive industry to unleash its full potential and deliver growth worth £50 billion over the next decade – in the process helping millions more drivers switch to zero emission motoring.

New research shows that targeted policies would see the new car market value grow from just over £70 billion a year today to almost £80 billion every year over the next decade, with more than 17 million fossil fuel cars replaced by zero emission vehicles by the end of 2035. At the same time, more than a million EV cars and vans could be rolling off production lines every year, increasing the sector’s value by 5% over the current outlook.1

The analysis forms the basis for Vision 2035: Ready to Grow, published today at the 16th SMMT International Automotive Summit. Building on SMMT’s Manifesto 2030, published last year, it sets out a clear cross-party plan to strengthen the market, bolster Britain’s trade, upskill the workforce, provide low-cost, low carbon electricity and deliver an industrial transformation strategy that will transition the UK to a net zero future – with the automotive sector providing green economic growth.

Market modelling has revealed that even halving VAT on new retail EV purchases for just the next three years would an additional 300,000 new zero emission car registrations on top of our current outlook – putting in total 2.3 million new zero emission cars on the road during that time. This would create a snowball effect for Britain’s net zero transition, dramatically accelerating overall EV car uptake over the next decade to more than 17 million, delivering £800 billion of revenue and meaning that by 2035, half of all cars in use would be zero emission. Such a step would see car emissions cumulatively drop by 175 MtCO2.2

Concurrently, steps to increase the UK’s global competitiveness in light vehicle production would see more than nine million zero emission cars and vans roll out of British factories between now and the end of 2035 – delivering more than £290 billion in revenue at factory gate prices, an increase of 5% on the current outlook.

Mike Hawes, SMMT Chief Executive, said,

The UK automotive sector has proved its resilience during recessions and pandemics. Now, it’s ready to grow. With voters preparing to cast their ballots next week, the next government will have the power to unlock the sector’s potential, boosting the economy, creating jobs and cutting carbon. The industry’s vision is of green growth and a fair transition for all. Whoever forms the next government, we urge them to create the conditions that will allow us to deliver on our promise.

The UK is Europe’s second largest zero emission car market3 and its biggest zero emission bus market.4 It also manufactures every vehicle type from cars, to vans, buses, trucks, and specialist and luxury automobiles, and exports them worldwide. The sector directly employs almost 200,000 people in manufacturing in every part of the country, and supports over 800,000 jobs in total across the nation – as well as keeping the rest of the economy on the move.

As a significant contributor to the UK economy – producing Britain’s most valuable goods exports5 – growing the automotive sector will deliver economic, social and environmental dividends.

Notes to editors

1 SMMT analysis in Vision 2035: Ready to Grow
2 SMMT analysis in Vision 2035: Ready to Grow
3 ACEA new car registrations, May 2024
4 Next stop, Net Zero: Britain boasts Europe’s biggest new zero emission bus market, 16 Feb 2024
5 https://www.gov.uk/government/statistics/uk-trade-in-numbers/uk-trade-in-numbers-web-version

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