Vehicle production in the UK
UK vehicle production in 2025 lowest since 1950s amid JLR cyberattack and new tariffs; SMMT chief optimistic for recovery in 2026
Recently released statistics from the Society of Motor Manufacturers and Traders (SMMT) paint a sobering picture of 2025 for the UK's automotive supply chain, with disruption from JLR's cyber incident, tariff uncertainty and pressure to shift towards EV production resulting in a 15.5% drop in vehicle production volumes in the UK.
Overall vehicle production in the UK was down 15.5% in 2025 compared with the previous year, with just 764,715 units produced – the lowest since 1952. Of these, 717,371 were cars and 47,344 were commercial vehicles. Car manufacturing output fell by 8% year-on-year, while commercial vehicle (CV) production plummeted by 62.3%.
“2025 was the toughest year in a generation for UK vehicle manufacturing," said SMMT CEO Mike Hawes. "Structural changes, new trade barriers, and a cyberattack that stopped production at one of the UK’s most important manufacturers combined to constrain output, but the outlook for 2026 is one of recovery."
JLR cyber incident fallout
One significant event that was undoubtedly partly responsible for the decline in car production volumes was the cyberattack on JLR in at the end of August which forced the company to halt production and retail operations. This production shutdown had to be extended in September and manufacturing operations only began to restart at JLR in early October.
The impact of the incident on JLR was obviously significant, causing a 24% year-on-year decline in revenue for the second quarter of 2025 to £4.9 billion ($6.6 billion). The automaker estimated the total cost of the cyberattack and the resulting operational disruption to be around £196m ($270m).
But with JLR production being such a big part of the UK's automotive sector, reports emerged during the shutdown that some of its suppliers had immediately faced challenges, with some facing bankruptcy or staff layoffs.
To mitigate this disruption, the UK Department for Business and Trade announced in late September that it would support JLR with a £1.5 billion ($2 billion) loan to “give certainty to its supply chain” in the wake of the cyber incident.
"We had a lot of engagement with the supply chain while [the shutdown] was going on, basically sharing those concerns about how extended their credit lines were, having been through Covid and semiconductor volatility," SMMT's Hawes told Automotive Logistics. "But surprisingly – perhaps reassuringly – while we had a framework to help them, not many were using it, which was encouraging."
Hawes identified that what this incident did reveal was the fragility of the industry when it comes to cybersecurity. "When it's one of your sector's companies [that's affected], and a big one, it underscores just how important your cybersecurity is," he said.
Exports and international trade
In 2025, 555,836 cars were manufactured for export in the UK, representing 77.5% of all vehicles manufactured in the UK last year. More than half (56.7%) of these vehicles were exported to EU member states, with USA (15%) and China (6.3%) the next biggest export markets.
Exports to each of the UK's top export destinations dropped in 2025 compared to the previous year: -3.3% in the EU, -18.3% in the US and -12.5% in China. All three of these markets saw trade and tariff uncertainty in 2025, which no doubt – combined with other relevant factors – contributed to lower volumes of exports from the UK.
With the EU, a key area of concern in 2026 will be the incoming Rules of Origin (ROO) changes that will come into effect at the end of the year. Under the post-Brexit Trade and Cooperation Agreement between the UK and the EU, 55% of a vehicle's value must be sourced locally after 31 December, 2026 – up from the current 44% – to avoid an additional 10% tariff.
Hawes shared his belief that it's in the interest of both the UK and the EU to come to an agreement that avoids the imposition of these tougher ROO measures. "We hope to see an agreement between the UK and the EU regarding that during in the course of the year," he said.
With the US, avoiding new tariffs will be priority number one. Tariffs on UK automobiles increased from 2.5% to 25% and then were reduced to 10% as the UK reached a deal with the US – all in the space of 2025, not to mention the threat of an additional 10% tariff related to the Greenland ownership dispute, which was subsequently removed.
And in terms of the UK's relationship with China, Hawes is hopeful the UK can attract investment from Chinese OEMs, but acknowledges that reducing energy costs will be crucial to ensuring the UK remains an attractive investment proposition for OEMs. He noted that, ideally, any foreign investment would be full production, not just assembly and CKDs and would use – where possible – the UK supply chain.
The UK government and auto industry must make the right moves in 2026 maintain all three of those relationships – something that is far easier said than done in today's tense geopolitical landscape. UK prime minister Keir Starmer has previously asserted that having to choose between Europe and the US is "plain" wrong, and is this week visiting China to meet with its president, Xi Jinping. SMMT's Hawes noted that working closer with any of these parties has the potential to cause rifts with another, describing this as "a real challenge".
Is the ZEV mandate causing OEMs to stall?
Another major pressure on the UK automotive industry throughout 2025 was OEMs restructuring plants to develop lower-emission vehicles to align with the UK's Zero Emission Vehicle (ZEV) mandate. "Obviously the mandate is putting a huge amount of stress on the market... it's costing a huge amount of money to be able to comply," said Hawes.
"Certainly amongst UK manufacturing, I think there's a sense that the mandate is too punitive," he added. "It's making getting further inward investment really challenging."
In 2025, 298,813 battery electric (BEV), plug-in hybrid (PHEV) and hybrid (HEV) cars were manufactured in the UK, representing an 8.3% increase on 2024 and a record 41.7% share of total output. And with production of the Nissan Leaf beginning in Sunderland towards the end of 2025 and the planned launch of seven new EV models across the UK this year, the SMMT expects EV output to grow even further in 2026.
Commercial vehicle output in the UK takes a nosedive
The steep 62.3% decline in CV production in the UK, Hawes explained, can be attributed largely to the consolidation of operations into Ellesmere Port and the closure of Stellantis' Vauxhall plant in Luton in late March 2025 as Stellantis consolidated its production at its Ellesmere Port plant in Cheshire.
Of course, this was not the sole reason for the decline in production, with resource limitations and a fall in export demand for CVs also contributing to the drop-off in production from 2024 to 2025.
In December, van, truck, bus and coach production volumes declined for a ninth consecutive month, falling by 67.7% to 2,281 units, while car production showed signs of recovery, rising 17.7% to 53,003 units and ending four months of decline.
Outlook for 2026
Despite a challenging 2025, Hawes remains optimistic for the year ahead. "The launch of a raft of new – increasingly electric – models and an improving economic outlook in key markets augur well," he said. "The key to long-term growth, however, is the creation of the right competitive conditions for investment; reduced energy costs; the avoidance of new trade barriers; and a healthy, sustainable domestic market. Government has set out how it will back the sector with its industrial and trade strategies, and 2026 must be a year of delivery.”
