The Society of Motor Manufacturers and Traders (SMMT) is calling on the incoming government to partner with the automotive industry to unlock its potential and achieve £50bn growth over the next decade, aiding millions of drivers in transitioning to zero emission vehicles.
Recent research indicates that with strategic policies, the new car market could expand from just over £70bn annually to nearly £80bn within the next ten years. This shift would involve replacing over 17 million fossil fuel cars with zero emission vehicles by 2035. Furthermore, the SMMT analysis predicts that more than a million electric vehicles (EVs) and vans could be produced annually, boosting the sector’s value by 5%.
The report, “Vision 2035: Ready to Grow,” launched at the 16th SMMT International Automotive Summit, builds on last year’s “Manifesto 2030.” It outlines a cross-party plan to enhance the market, strengthen Britain’s trade, upskill the workforce, provide affordable low-carbon electricity, and drive industrial transformation towards a net zero future, leveraging the automotive sector for green economic growth.
Market modeling suggests that halving VAT on new retail EV purchases for the next three years could result in an additional 300,000 zero emission car registrations, totaling 2.3 million new zero emission cars on the road during that period. This would significantly accelerate EV uptake, with projections of over 17 million zero emission cars by 2035, generating £800 billion in revenue and reducing car emissions by 175 MtCO2.
Additionally, bolstering the UK’s competitiveness in light vehicle production could result in over nine million zero emission cars and vans manufactured domestically by 2035, yielding over £290 billion in revenue, a 5% increase from current forecasts.
Mike Hawes, SMMT chief executive, stated, “The UK automotive sector has shown resilience through recessions and pandemics and is now poised for growth. The next government has the opportunity to unlock this potential, driving economic growth, creating jobs, and reducing carbon emissions. We urge the incoming government to create the conditions necessary for us to deliver on our green growth vision and ensure a fair transition for all.”
The SMMT highlighted the UK’s position as Europe’s second largest zero emission car market and its leading zero emission bus market. The UK automotive sector produces and exports a wide range of vehicles, from cars and vans to buses, trucks, and luxury automobiles, employing nearly 200,000 people in manufacturing and supporting over 800,000 jobs nationwide.
As a major contributor to the UK economy, producing Britain’s most valuable goods exports, the SMMT asserts that growing the automotive sector will yield significant economic, social, and environmental benefits.