7:26 am, November 26, 2025
Budget proposals like a pay-per-mile EV tax and scrapping employee car schemes risk killing demand and would inflict ‘severe damage’ on the UK car industry, the Society of Motor Manufacturers and Traders (SMMT) has said.
The body hosted its annual dinner in London last night (Nov 25) on the eve of the Autumn Budget, and it welcomed measures to support the car industry such as the Industrial Strategy and £2.5bn package to boost ‘innovation, productivity and inward investment’
But the measures including a pay-by-mile EV tax hinted at in the Budget risk ‘negating this support’ and inflict ‘real damage’, suppressing demand. It declared: ‘No mitigation measures, including additional grant funding, could offset the message this measure would send consumers.’
SMMT chief executive Mike Hawes said: ‘Government has said it will back automotive to the hilt and, for the most part, deeds have matched words with trade agreements, regulatory flexibilities and an Industrial Strategy supplemented by a £2.5bn fund that is designed to support automotive as a growth sector.
Hawes also highlighted Employee Car Ownership schemes, saying that scrapping them would cost the industry and the government a combined £1.5bn per year, and must 5,000 manufacturing jobs at risk.
‘But with the good also came the bad and the downright ugly, with the proposed ending of Employee Car Ownership schemes.’
He added: ‘The Budget this week is a chance to align fiscal measures to growth and the future success of the sector.
‘Rather than road pricing for EVs, we need to see measures that stimulate consumer demand, so we can deliver the tax revenues, jobs, investment, productivity and growth that is in everyone’s interests.’
The body also called for the government to ‘create the conditions needed’ to restore the UK car industry a 1.3-million vehicle manufacturing hub by 2035.
