Amidst growing demand for electric vehicles (EVs) and a resolution of supply chain issues, the UK’s car industry experienced a significant boost in September, with car exports rising by 32.2% compared to the previous year. A total of 64,727 units were shipped overseas during the month, with close to six out of every ten cars produced being sent to the European Union (EU).
This surge in export demand has marked the strongest growth of the year for the UK’s car output, showcasing the resilience and recovery of the industry. The Society of Motor Manufacturers and Traders (SMMT) revealed that a total of 88,230 units were rolled out of factory lines in September, nearly doubling the production numbers from August.
One of the main contributing factors to the growth in car exports has been the increasing popularity of EVs. EV output in September saw a remarkable increase of 41.5% compared to the previous year. However, the UK faces challenges in meeting the rules of origin requirements outlined in the trade deal agreed upon when it left the EU. These requirements stipulate that a larger proportion of EV parts must be manufactured locally to qualify for tariff-free trade from 2024 onwards. Failure to comply would result in a 10% tariff, potentially making EVs more expensive and affecting demand.
The SMMT and industry experts have called for a three-year delay in implementing the stricter rules of origin requirements to maintain competitiveness. This would provide the necessary time for the industry to adjust and adapt to the new regulations without compromising trade relations with the EU.
