According to figures published by trade body the Society of Motor Manufacturers and Traders (SMMT), UK vehicle production dipped below one million units in 2024.
Factories turned out a total of 905,233 cars and commercial vehicles, 11.8% lower than in 2023. Commercial vehicle production did grow by 4% to reach its best level since 2008, but SMMT says car output dropped 13.9% over the year, with December the tenth consecutive month of decline.
This is attributed to the end of production for some long running models as factories retooled for EVs, weakness in key global markets, and a slowdown in the transition to electrification amid “tough economic conditions”.
The SMMT says that what it views as the challenges of moving from internal combustion engine (ICE) to EV production were reflected in a “slew” of restructuring announcements across the UK and Europe.
This includes changes the likes of Stellantis, the company that owns Vauxhall, announcing the closure of one of its two UK manufacturing sites.
The company’s announcement said that the proposed closure, while it creates an all-electric, sustainable vehicle hub at its Ellesmere Port site in Cheshire through a £50 million investment, was “made within the context of the UK’s ZEV Mandate”. At the time, it was reported that the Luton site’s closure threatens 1,100 jobs.
Although there was an expected decline in battery electric (BEV), plug-in hybrid (PHEV) and hybrid (HEV) vehicle output, low or no emissions vehicles still accounted for 35.4% of overall output, the second highest share on record.
SMMT chief executive Mike Hawes commented: Amid significant geopolitical and trade tensions, UK manufacturers are set on turning billions of pounds of investment into production reality, transforming factories to make new electric vehicles for sale around the world.”
Over £20 billion worth of investment was announced in 2023, and a further £3.5 billion in 2024. Hawes said that “growing pains are inevitable” but SMMT’s independent production outlook expects UK car and light van production to reach 1.1 million units in in 2030.
Car makers meet EV sales targets
The UK zero emission vehicle (ZEV) mandate sets a quota for the proportion of vehicles sold each year to be electric, increasing up until a 2035 total ban on new petrol and diesel engine vehicles.
The mandate was blamed for the challenging year that automotive manufacturers had in 2024.
However, SMMT’s figures showed record EV sales last year, accounting for a market share of 19.6% as the UK new car market recorded its second successive year of growth. The ZEV mandate meant 22% of new vehicles sold to be battery electric, but there is a flexibility written into the ZEV mandate that allows car makers credits towards the target.
Earned from the sale of large numbers of low emission petrol and diesel cars, including hybrids, the credits can be sold between manufacturers. Analysis of SMMT’s figures by the Energy and Climate Intelligence Unit (ECIU), states that a further 3% credit was earned by the sale of low-CO2 emissions petrol and diesel vehicles.
Stellantis, BMW, Mercedes and Hyundai all exceeded their targets for EV sales, but Ford, which called the rules of the ZEV mandate “unworkable”, fell short.
Commenting on Stellantis’ announcement that it has hit the EV sales targets, Colin Walker, head of transport at the ECIU, said: “In hitting their EV sales targets in the first year, Stellantis has shown that it is able to adapt and compete as the world moves away from the internal combustion engine.