SMMT warns EU local content rules threaten UK car exports
The SMMT warns that the EU's local content proposal could exclude British cars from corporate fleets. The group also called for a review of UK EV sales targets.
The United Kingdom automotive industry is facing a potential crisis due to a European Union proposal regarding local content requirements for electric vehicles. Mike Hawes, CEO of the Society of Motor Manufacturers and Traders (SMMT), stated that the Made in EU initiative poses a significant risk to British car manufacturers by potentially cutting off access to the lucrative European corporate fleet market.
According to Hawes, corporate fleets account for more than 60% of new car sales within the EU. Given that roughly 60% of British car production is destined for the European market, the impact of being excluded from these sales could be devastating. The SMMT is seeking clarity on whether the proposal is intentionally designed to shut out British-made vehicles or if it is simply a result of poor drafting.
"The Commissions proposal as it is currently written would exclude British-made cars from corporate fleets, which make up more than 60% of the European Unions new car sales."
In addition to external trade pressures, the industry is grappling with domestic policy. The SMMT has requested a review of the British government’s zero emission vehicle (ZEV) mandate, which sets strict targets for electric vehicle sales. Under current rules, EVs must represent 33% of an automaker's new car sales by 2026, increasing to 80% by 2030. While the EU has adjusted its timeline for banning fossil-fuel cars, the British government maintains a 2035 deadline.
Financial pressures are mounting as manufacturers struggle with a lack of affordable EV models. Industry data suggests that carmakers have already allocated approximately 10 billion pounds ($13 billion) toward discounts to encourage EV sales. Nicole Melillo Shaw, the UK managing director for VOLVO CAR AB-B, expressed concern over the current economic model for electric transition.
"If you do the maths, its just unsustainable."
However, some industry figures believe the mandate is essential for long-term growth. Fiona Howarth, founder of Octopus Electric Vehicles, suggested that the policy provides the certainty needed to bring more choice and better value to consumers.
"Weakening this policy now would be the wrong approach."
