The total Gross Value Added (GVA) contribution to the UK economy of the UK automotive sector could rise by 35 per cent, or £16.1bn, by 2035 or decrease by 73 per cent, or £34.1bn, depending on how rapidly the sector transitions to the manufacture of Battery Electric Vehicles (BEVs), a new report finds.

Commissioned by the Energy and Climate Intelligence Unit (ECIU), with analysis provided by CBI Economics, the report predicts a GVA difference between a best-case and a worst-case scenario of over £50bn, greater than the current total automotive sector contributions.

The UK’s automotive sector currently contributes £46.8bn in GVA and supports over 552,000 FTE (Full-Time Equivalent) jobs. CBI Economics forecasted the size of the automotive sector and the BEV production sub-sector between 2024 to 2035, under four different scenarios ranging from a best-case scenario in which the transition to EV production moves rapidly, to a worst-case scenario in which we see no increase in the share of vehicles being built that are electric.

It found that not only does the financial (GVA) contribution of the sector vary significantly between the most and least optimistic scenarios, but FTE employment contributions were forecast to change by similar margins, with the industry estimated to support 167,000 more FTE jobs by 2035 and 404,000 fewer FTE jobs by 2035 in the most and least optimistic scenarios respectively. Stagnation of BEV production could therefore see the automotive sector lose up to three quarters of its jobs.

With global competition set to intensify in the BEV market, the report highlights that expanding BEV production will be vital for both supporting domestic demand and for export demand, as historically the majority of UK-produced vehicles (79 per cent in 2023) are exported.

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