SMMT Update – Open trade and realism must drive UK automotive growth
The UK’s latest vehicle production data out this week shows volumes rose in May, for the first time this year, albeit set against a weak month last year when US tariff uncertainty loomed. The UK-US trade deal that came into force in June 2025 remains crucial, with cross-Atlantic shipments up more than 80% year-on-year in May. However, even as the UK marked 10 years since the Brexit referendum this week, the EU remains by far our most important export destination, receiving more than half of all UK car exports.
Brexit created fundamental challenges and costs for the automotive industry on both sides of the Channel, but we have continued to trade freely and openly thanks to the Trade and Cooperation Agreement signed in 2021. Flourishing UK-EU electric vehicle trade has been a major result, up more than four-fold in value in the past five years. Yet there is now a real and immediate risk of stalling that trade.
More onerous rules of origin requirements for electric and plug-in hybrid vehicles, and protectionist ‘Made in Europe’ proposals, risk putting the UK at a systemic disadvantage. They would weaken both sides’ industrial competitiveness, consumer choice, highly integrated supply chains and our EV transitions. Intensifying dialogue and rescheduling the UK-EU summit are therefore priorities so both sides can reach timely resolutions.
For UK competitiveness globally, trade is not the only fundamental threat. It was deeply concerning this week that industry warnings over ZEV market realities have been disregarded by the Climate Change Committee’s latest report to Parliament – urging government to ‘stand firm’ on the mandate based on the heroic assumption that 95% of the new car and van market will be EV by 2030. That is significantly more than even the most optimistic industry outlooks.
The CCC does not have responsibility for employment and economic growth, but industry and government do, which is why we must challenge the CCC’s assumptions – or risk unintended and irreversible consequences for future UK production, jobs and investment.
SMMT will continue to engage cross-industry and with policymakers, and we look forward to welcoming a wide range of influential speakers to a sold-out International Automotive Summit next week, covering the urgent issues and stark realities our sector faces. A waiting list is now in operation which you can join here.