The UK car industry is facing an unprecedented collapse, with production plummeting and domestic sales in freefall.
Labour’s penal taxes on traditional petrol and diesel vehicles, coupled with strict mandates on electric vehicle (EV) production, are forcing factories to close and leaving thousands of jobs at risk.
Critics have slammed the Labour government for its “wanton vandalism,” accusing it of pushing policies that are decimating one of the country’s most vital industries.
Sir John Redwood asked on X: “When will the government change its deeply damaging vehicle policies which are leading to so many factory closures and lost jobs?”
He added: “UK car output in November for the domestic market was down a disastrous 56.7%. Too few U.K. consumers want the new electric products government insists on.”
A Sharp Decline in November Production
According to the Society of Motor Manufacturers and Traders (SMMT), UK car production fell by a disastrous -30.1% in November, with only 64,216 cars rolling off factory lines — the worst November performance since 1980. Domestic production suffered a particularly harsh decline of -56.7%, while export production fell -21.3%.
The SMMT report attributes the collapse to a mix of strategic product decisions, weak global markets, and the costly transition from internal combustion engines (ICE) to EVs.
Mike Hawes, Chief Executive of SMMT, stated:
“These figures offer little Christmas cheer for the sector. While a decline was to be expected given the extensive changes underway at many plants, manufacturing is under pressure at home and abroad, with billions of pounds committed to new technologies, new models and new production tooling.”
Penal Policies and Lacklustre EV Sales
The Labour government’s push for EV adoption has been heavily criticised for prioritising environmental targets over economic realities. Penal taxes on petrol and diesel vehicles, combined with an early ban on new ICE sales by 2030, have left many manufacturers struggling to adapt.
While retooling for EV production is underway, the domestic market for electric vehicles has failed to grow as quickly as expected. UK consumers are reluctant to switch, citing high costs and inadequate charging infrastructure. The result? Factories producing EVs are seeing dwindling demand, compounding the industry’s woes.
A Struggling Domestic Market
UK consumers are not buying EVs fast enough to support the government’s ambitious policies. Although retooling for EV production is underway, the domestic EV market remains sluggish, with concerns over high costs, inadequate charging infrastructure, and low consumer confidence.
Hawes added:
“Government can help by supporting consumers in the transition, fast-tracking its Industrial Strategy for advanced manufacturing and, most urgently, reviewing the market regulation which is putting enormous strain on the sector.”
Figures Paint a Bleak Picture
Year-to-date figures reveal a -12.9% decline in UK car production, with 734,562 cars manufactured from January to November — over 100,000 fewer than during the same period in 2023. The production of electrified vehicles, including battery electric, plug-in hybrid, and hybrid models, fell by -19.7% during the same period.
Exports now account for more than 80% of UK car production, with more than half of those vehicles heading to the EU. The decline underscores the challenges manufacturers face as they transition from ICE vehicles to EVs, with retooling and supply chain adjustments affecting output.
Calls for Urgent Action
Industry leaders are urging the government to address the crisis with immediate measures. The SMMT is calling for the rollout of consumer incentives, improvements to EV charging infrastructure, and clarity on regulations such as the Zero Emission Vehicle (ZEV) mandate, which imposes strict EV production targets on manufacturers.
Hawes explained the critical link between domestic market strength and production levels:
“The link between a vibrant local market and healthy local production is a critical one.”
With production levels plummeting and domestic EV sales faltering, the UK car industry is at a crossroads. Critics of the government’s policies warn that further factory closures and job losses are inevitable unless urgent action is taken.
The Labour government must now choose whether to recalibrate its approach or risk seeing one of the country’s key industries continue its decline.
Read SMMT’s full report here.
Main photo credit: SMMT
