What's Happening?
The UK automotive industry has achieved £115bn in imports and exports in 2024, according to the Society of Motor Manufacturers and Traders (SMMT) Trade Report. This marks the third consecutive year of surpassing £110bn in trade, despite challenges posed by Brexit. The report highlights a 424% surge in UK-EU electric vehicle trade since 2019, with electrification reshaping trade dynamics. However, new battery rules set for 2027 could impose tariffs of up to 22% on vehicles failing to meet local content thresholds.
Why It's Important?
The resilience of the UK automotive industry is significant as it continues to be a global trading powerhouse post-Brexit. The surge in electric vehicle trade underscores the sector's adaptation to new market demands and environmental goals. However, the looming battery rules pose a risk to future growth, potentially affecting competitiveness and market access. The industry must navigate these challenges to maintain its position and contribute to economic growth.
What's Next?
The SMMT is urging the government to negotiate favorable terms for battery materials and monitor compliance with upcoming rules. Efforts to rejoin the Pan-Euro Mediterranean Convention could ease origin requirements and enhance market access. The industry will need to focus on innovation and collaboration to meet future challenges and capitalize on growth opportunities.
