The Society of Motor Manufacturers and Traders (SMMT) has reported that battery electric, plug-in hybrid and hybrid electric vehicle volumes were up 49.9% to 28,329 units, tallying with the current shift towards EVs, with electric car registrations continuing to rise in absolute numbers year on year.
The UK car production slightly dropped in the first month of 2023, with output down -0.3% to 68,575 units, as industry analysts linked the 215 units drop to structural changes, reflecting a move from car to van making at one major plant, but with supply chain shortages still afflicting some manufacturers.
In 2021, the UK car industry recorded its worst output for the month of July since 1956 as the sector struggled with ongoing staff shortages associated with the Covid-19 pandemic alongside strained supplies of semiconductors.
The sector started to recover last summer as the global chip shortage began to ease, even though US officials have warned that it is likely to continue to some degree through the rest of 2023.
Commenting on the industry situation, SMMT chief executive, Mike Hawes, said: “Automotive manufacturing can drive long-term growth for the low-carbon economy but the sector needs competitive conditions to attract investment.
“Recent global developments, however, suggest increasing protectionism which, if not challenged or mitigated, could put the UK at a disadvantage.
“To deliver a wholesale industrial transformation we need a competitive framework and a pitch that promotes advanced vehicle manufacturing internationally. We now look to the forthcoming Budget for the necessary measures that will enable the automotive sector to deliver its undoubted potential”, Hawes added.
The Society’s latest outlook anticipates that UK car output will rise by 9% to 842,200 cars this year, primarily driven by growth in electrified vehicle production. By 2025 car and light van production volumes are predicted to surpass one million vehicles.
Speaking on the industry’s trend, Richard Peberdy, of KPMG, said: “An easing of supply shortages and continued demand for new cars, despite the cost-of-living squeeze, is keeping the market moving, but medium to longer-term questions remain unanswered for the industry, despite investing over £10bn in electric vehicle capability since 2011.
“At present the UK is proving a less attractive proposition for new vehicle manufacturing facilities due to relatively high labour and energy costs, and access to raw materials and chemicals.
“Whilst the UK is a global leader in high-value skills and research, in a globally competitive environment the Government and the local industry need to do more to show that it can be a viable manufacturing base for battery and electric vehicle manufacturing at scale”, Peberdy advised.
