Vision 2035: Readiness for development

Tuesday, June 25, 2024

The Society of Motor Manufacturers and Traders (SMMT) is calling on the next government to work in partnership with the car industry to unlock its full potential and deliver £50 billion of growth over the next decade, helping millions more drivers make the switch to zero emission motoring.

New research shows that targeted policy will lead to the value of the new car market increasing from just over £70 billion a year today to almost £80 billion a year over the next decade, with more than 17 million fossil fuel cars replaced by zero emission vehicles by the end of 2035 At the same time, more than one million electric passenger cars and delivery vans may roll off production lines every year, which will increase the value of the sector by 5% compared to current forecasts.¹

The analysis forms the basis of Vision 2035: Ready for Growth, released today at the 16th SMMT International Automotive Summit. Building on the SMMT 2030 Manifesto, published last year, it sets out a clear, cross-party plan to strengthen the market, strengthen UK trade, upskill the workforce, deliver cheap and low-carbon electricity and develop an industrial transformation strategy that will transform the UK economy towards a net zero future net – with the automotive sector ensuring green economic growth.

Market modeling has revealed that even halving VAT on new retail purchases of electric vehicles over the next three years would result in an additional 300,000 registrations of new zero emission cars beyond our current forecasts – meaning a total of 2.3 million new zero-emission cars. . This would create a snowball effect for the UK’s transition to net zero, dramatically increasing overall demand for electric cars over the next decade to over 17 million, providing revenues of £800 billion and meaning half of all cars in use by 2035 will have zero greenhouse gas emissions. . Such a step would result in a cumulative reduction in car emissions of 175 MtCO2.²

At the same time, by taking steps to increase the UK’s global competitiveness in the production of light vehicles from UK factories, over nine million zero emission passenger cars and vans will have left UK factories by the end of 2035, generating over £290 billion in revenue at ex works prices. an increase of 5% compared to current forecasts.

Mike Hawes, CEO of SMMT, said:

The UK automotive sector has proven its resilience during the recession and pandemic. Now it is ready to grow. As voters prepare to cast their ballots next week, the next government will have the power to unlock the sector’s potential, boost the economy, create jobs and reduce greenhouse gas emissions. The industry’s vision is green growth and a just transition for all. Whoever forms the next government, we urge them to create the conditions that will allow us to deliver on our promise.

The UK is the second largest market for zero emission cars in Europe³ and the largest market for zero-emission buses.⁴ It also produces every type of vehicle, from passenger cars to commercial vehicles, buses, trucks and specialty and luxury cars, and exports them all over the world. The sector directly employs almost 200,000 people in manufacturing plants in every part of the country and supports a total of over 800,000 jobs across the country, as well as keeping the rest of the economy running.

As a significant participant in the UK economy – producing the UK’s most valuable exports⁵ – the development of the automotive sector will bring economic, social and environmental benefits.

Notes for editors

1 SMMT analysis v Vision 2035: Readiness for development
2 SMMT analysis v Vision 2035: Readiness for development
3 new ACEA car registrations, May 2024
4 Next stop, Net Zero: UK boasts Europe’s largest new zero emission bus market, 16 February 2024.
5 https://www.gov.uk/government/statistics/uk-trade-in-numbers/uk-trade-in-numbers-web-version