The Society of Motor Manufacturers and Traders (SMMT) is warning that urgent action is needed for a sector under pressure from mounting costs, global protectionism and rising risk of disinvestment.

SMMT’s latest State of the Automotive Nation report, published today and featuring the second UK Automotive Business Leaders Barometer, sets out a ‘blueprint’ for the next Prime Minister.

In it, the most immediate concern is the ZEV Mandate. Manufacturers are committed to net-zero and have invested billions of pounds in new zero emission technology and models, but the regulation is running ahead of natural market demand. This is forcing companies to subsidise the market at unsustainable levels, undermining residual values and weakening the UK as both a market and a manufacturing base. Every business leader responding to the survey said the UK is behind the trajectory needed to meet the 2030 target, with almost three-quarters (73.8 per cent) saying it is significantly behind.

From January 2027 annual targets will rise to 38 per cent EV (battery electric vehicle) sales for cars and 34 per cent for vans, before climbing again to 52 per cent and 46 per cent respectively in 2028.

Car makers alone have already spent more than £12bn on discounts to stimulate demand, but current market shares are 23.9 per cent for cars and 9.5 percent for vans.

Mike Hawes, SMMT chief executive explained: “Reforming the ZEV Mandate is not about weakening ambition; it is about making the transition achievable, protecting investment and ensuring the UK remains a place where automotive businesses can build, sell, export and grow. The window for action is closing, which means we cannot wait for lengthy discussions.”

---