New independent LSE research examines how electrification, shifting global value chains and geopolitical competition are reshaping the UK and European automotive industries, and why deeper strategic cooperation could strengthen their future competitiveness.
The global automotive industry is undergoing fundamental change.
Electrification is transforming production and supply chains. Investment and technological capabilities are shifting geographically. Batteries and critical inputs have become strategic assets. At the same time, geopolitical tensions are bringing trade, economic security and industrial policy increasingly closer together.
Against this backdrop, the Trade Policy Hub at LSE Consulting has conducted an independent study, commissioned by the European Automobile Manufacturers’ Association (ACEA) and the Society of Motor Manufacturers and Traders (SMMT), examining the evolving relationship between the UK and EU automotive industries.
Strategic Cooperation: UK–EU Automotive Value Chains Amid Global Challenges combines evidence on automotive business groups, ownership networks, investment and innovation with analysis of global value chains and the changing trade and industrial policy environment.
The opportunity is to turn UK-EU interdependence into a strategic asset: strengthening resilience, supporting investment and innovation, and improving the global competitiveness of the automotive industry on both sides of the Channel.
Mike Hawes, SMMT Chief Executive
The UK and EU are bound by €80 billion in annual automotive trade and millions of jobs. At a time of intense global competition, this report makes clear the need for both sides to collaborate and remove barriers to trade. Our collective response must strengthen both sectors, with the UK included in ‘Made in Europe’ measures, a pragmatic solution to 2027 rules of origin, and stronger integrated supply chains. Get this right and we can attract investment, safeguard jobs and drive growth on both sides.
