The Society of Motor Manufacturers & Traders (SMMT) has called for “urgent action” from the government to help the automotive sector under pressure from “mounting costs, global protectionism and rising risk of disinvestment.”
Speaking at the SMMT International Automotive Summit in London, CEO Mike Hawes welcomed progress in the first year of the Modern Industrial Strategy but said there must now be an “unrelenting focus” on delivery.
The SMMT said the most immediate concern is the ZEV Mandate, which it said was forcing companies to subsidise the market at unsustainable levels, undermining residual values and weakening the UK as both a market and a manufacturing base.
Successive dealers have argued that the ZEV Mandate is distorting with demand for EVs lagging government imposed targets.
Hawes said: “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.”
SMMT’s latest State of the Automotive Nation report published today features the second UK Automotive Business Leaders Barometer.
The report welcomes recent progress, including £4bn of DRIVE35 funding; action on industrial electricity costs through the British Industrial Competitiveness Scheme (BICS); trade deals with the US, India and the GCC; EV grants; and regulation to support self-driving vehicles.
But it warns that these gains will be undermined unless three major issues are addressed: reform of the ZEV Mandate, securing fair UK-EU trade, and cutting the underlying energy and business costs that shape investment decisions.
