The Society of Motor Manufacturers and Traders (SMMT) reported that UK vehicle production fell below one million units in 2024. Several factors impacted this drop, including the end of some long-standing models and retooling for electric vehicles (EV), SMMT said. Key global market weakness and a slowdown in electrification also contributed.

Factories produced 779,584 cars and 125,649 commercial vehicles, totaling 905,233 units, a decrease of 11.8% from 2023. Commercial vehicle output grew by 4.0%, its highest level since 2008.

Electrified Vehicle Production Faces Temporary Decline

UK vehicle production saw a decline in electric and hybrid models, according to SMMT. Battery electric (BEV), plug-in hybrid (PHEV), and hybrid (HEV) vehicles fell to 275,896 units, down by 20.4% from the previous year. However, these vehicles still made up 35.4% of total output. The UK invested £20 billion (approx. $25 billion) in 2023 and £3.5 billion (approx. $4.3 billion) in 2024 to support the transition to EV production, making the decline temporary, SMMT said.

“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,” said Mike Hawes, SMMT Chief Executive. “Growing pains are inevitable, so the drop in volumes last year is unsurprising. With new, exciting models and battery production on the horizon, the growth potential is clear.”

Factors Affecting UK Vehicle Production Decline

After restructuring announcements across the UK and Europe, December marked the 10th consecutive month of decline in British car production. Output dropped by 27.1% to 45,022 units, according to SMMT. Car production fell by 13.9% over the year. Output for the UK market decreased by 8.0% to 176,019 units. Exports dropped by 15.5% to 603,565 units.

Nearly 80% of cars produced were for export, SMMT said. 77.5% (467,937 units) shipped to the EU, US, and China. Exports to the EU and China fell by 24.3% and 21.8%, respectively. Exports to the US rose by 38.5%, highlighting the need for supportive trade conditions, according to SMMT. Turkey and Japan followed in the UK’s top five export markets.

Outlook for Future Growth

The latest production outlook expects UK vehicle production to reach 839,000 units in 2025, SMMT said. It could rise to 930,000 units by 2027. The potential exists to exceed one million units by 2028 and 1.1 million by 2030. This growth depends on improving market demand and economic conditions, alongside greater consumer confidence.