9:18 am, March 14, 2025
Automotive industry jobs are at risk of being axed unless consumer demand for EVs starts to rise.
That is according to the SMMT, which is calling for additional government investment in order to ‘convert the electric sceptics’.
The outfit’s CEO, Mike Hawes, says without additional support, the UK is in danger of ‘de-industrialisation’, which could have a major impact on jobs.
Hawes also described the decision to remove EVs’ exemption from vehicle excise duty and the expensive car supplement as ‘disincentives’ for people who might be mulling over a switch to an EV.
He said: ‘We need to be pulling every lever to grow this demand because the consequences of this regulatory framework and an inability to meet it, you’re beginning to see play out in terms of flattening of sales, production is down, plants unfortunately closed or certainly consolidated, jobs lost.
‘Nobody wants that, because this should be a driver of growth, not a driver of de-industrialisation.’
The warning comes after Stellantis announced plans to close its Luton plant next month, with BMW also shelving plans for electric Mini production in Oxford.
Speaking at Car Dealer Live yesterday, Stellantis’s UK boss, Eurig Druce, defended the decision but said that the UK is ‘not open for business’.
The SMMT’s modelling suggests halving VAT on new EV purchases would boost the market by a further 15% on top of current outlooks, delivering a total of two million new EVs by 2028.
This would have an initial cost to the Treasury of around £1,000 per car, the SMMT said.
But combined with flexible regulation and mandated roll out of charge points, it would have benefits such as increasing business for charge points, insurance, maintenance and other sectors, and reducing road transport emissions, according to the automotive body.
A survey commissioned by the SMMT indicated just 11.6% of new car buyers intend to switch to electric in the next three years.
However, nearly two in five so-called ‘electric sceptics’ said they would change their mind with a purchase incentive.
Hawes said investment by manufacturers means ’10 times as many drivers are going electric compared with just five years ago’.
He went on: ‘This is great progress but with the right support for consumers, we can go beyond current expectations to put a total of more than two million new EVs on the road by 2028.
‘Government investment to convert the electric sceptics would energise business across the country far beyond just the automotive sector.
‘Every stakeholder would benefit from the impact of consumer incentives which, when combined with binding targets for charge point rollout and more flexible regulation, would create a virtuous circle of rising demand that stimulates green economic growth.’
Another major topic at yesterday’s Car Dealer Live conference in Gaydon, was the potential impact of tariffs, after President Donald Trump announced a 25% tax on US imports.
Hawes has also adressed the subject, saying that the automotive industry ‘doesn’t want to see an increase in tariffs’.
He praised the government for ‘treating things very calmly’ in its response, adding: ‘Cool heads can hopefully prevail’.’
