SMMT urges new government to help unlock £50bn growth potential

The Society of Motor Manufacturers and Traders (SMMT) is urging the next government to collaborate closely with the automotive industry to unlock its full potential, projecting a £50 billion growth opportunity over the next decade.

The industry body cites research indicates that targeted policies could boost the annual value of the new car market from just over £70 billion to nearly £80 billion within the next ten years.

By 2035, these measures could replace over 17 million fossil fuel cars with zero emission vehicles. Concurrently, the production of more than a million electric cars and vans annually is anticipated to boost the sector's value by 5% from current projections.

Presented at the 16th SMMT International Automotive Summit, "Vision 2035: Ready to Grow" builds upon last year's Manifesto 2030. It outlines a comprehensive cross-party strategy to strengthen market dynamics, enhance trade, foster workforce skills, ensure affordable low-carbon electricity, and drive an industrial transformation towards a net zero future.

SMMT market simulations suggest that halving VAT on new retail EV purchases for the next three years could lead to an additional 300,000 zero emission car registrations, totalling 2.3 million by 2035.

This accelerated adoption would propel the UK towards a milestone where half of all cars in use would be zero emission, reducing cumulative car emissions by 175 MtCO2.

Simultaneously, efforts to enhance the UK's competitiveness in light vehicle manufacturing could see over nine million zero emission vehicles rolling off British production lines by 2035, generating more than £290 billion in factory gate revenue, a 5% increase over current forecasts.

Mike Hawes, CEO of SMMT, said: "The UK automotive sector has demonstrated resilience through economic downturns and global crises. Now poised for growth, the next government holds the key to unlocking our sector’s potential, boosting the economy, creating jobs, and advancing our carbon reduction goals. Our vision is one of sustainable growth and an equitable transition for all. We urge the incoming government to create the necessary conditions to fulfil this vision."