Zero-emission vehicles could grow automotive industry by £50bn

• Targeted policies would see the new car market grow to almost £80bn every year
• More than 17 million fossil fuel cars will be replaced with zero emissions by 2035
• About 1 million EVs could be rolling off production lines every year

The SMMT says the automotive industry has a lot to gain from people switching to zero-emissions vehicles 

The Society of Motor Manufacturers and Traders (SMMT) has said the automotive industry could grow by as much as £50bn over the next decade if the government helps drivers switch to zero-emission vehicles. 

New research from the automotive trade body shows that targeted policies would see the new car market value grow from just over £70bn a year today to almost £80 billion a year over the next decade.

If this were to be achieved, the trade body said more than 17 million fossil fuel cars would be replaced by zero-emissions vehicles by the end of 2035.  

At the same time, more than 1 million electric vehicles (EV) could be rolling off production lines every year, the body claimed.  

The research has formed the basis for Vision 2035: Ready to Grow, which was published at the SMMT’s sixteenth International Automotive Summit. 

This built on SMMT’s Manifesto 2030, which was published in 2023, which sets out a cross-party plan to strengthen the trade, bolster Britain’s trade, upskill the workforce, provide low-cost, low carbon electricity and deliver a strategy that will transition the UK to a net zero future. 

Market modelling also revealed that even halving VAT on new retail EV purchases for the next three years would result in an additional 300,000 new zero emission car registrations on top of SMMT’s current outlook. 

The SMMT said this would create a snowball effect for Britain’s net zero transition, pushing EV uptake over the next decade to more than 17 million, resulting in £800bn of revenue. 

Mike Hawes, chief executive, SMMT, said he expects more than 9 million zero emission cars and vans to roll out of British factories between now and the end of 2035.

According to Hawes, this would deliver more than £290bn in revenue at factory gate prices, an increase of 5% on the current outlook. 

“The UK automotive sector has proved its resilience during recessions and pandemics. Now, it’s ready to grow,” Hawes said. 

With voters preparing to cast their ballots next week, the next government will have the power to unlock the sector’s potential, boosting the economy, creating jobs and cutting carbon. 

“The industry’s vision is of green growth and a fair transition for all. Whoever forms the next government, we urge them to create the conditions that will allow us to deliver on our promise.”