The UK automotive industry could unlock a £4.6 billion boost to domestic manufacturing by 2030, according to analysis by the Society of Motor Manufacturers and Traders (SMMT).
It shows demand for UK sourced automotive parts rising by 80% to 2030, with opportunities in electric vehicles and a return to annual output of 1.3 million vehicles by 2035.
December 2025 saw the start of next generation volume battery electric car production in Sunderland and, with the planned launch of seven new EV models across the UK this year, BEV volumes are anticipated to more than double by 2028.
As a result, demand for electric motors, power electronics and drive systems (PEMD) is set to surge by more than 350% by the end of the decade, while automotive electronics demand is expected to more than double, driven by the increased use of displays (including head-up displays), wiring systems and computing power in modern electrified vehicles.
There is also potential for increased battery-related localisation, demand for which is set to more than triple by 2030, with significant spending across battery packs, modules and cells, alongside supporting systems such as casings, battery management software and thermal management.
In addition, high value opportunities remain in seat assemblies, interior and exterior plastics, pressings, castings and braking systems.
While the UK’s supply chain offers huge potential, the growing connected and automated mobility (CAM) market also presents massive opportunities with a supportive regulatory framework facilitating the shift from testing to deployment. It is set to reach £24 billion by 2040, with driverless taxis already testing in London ahead of planned rollout later this year, the SMMT added.
The news comes as SMMT launches a new campaign, ‘Opportunity Auto’, showcasing the opportunities and strengths of the UK’s advanced manufacturing sector to investors at home and globally. The SMMT said the campaign complements the UK Government’s ambitions in its recent Industrial Strategy, including the Advanced Manufacturing Sector Plan.
Mike Hawes, SMMT Chief Executive, said:
“The UK automotive sector is transforming at pace, and for companies looking to invest in Britain the opportunities are clear. We have the skills, the innovation and the industrial base built on the billions already invested into Britian by global brands.
“With a modern, long term industrial strategy – with automotive at its heart – the UK is a safe and stable destination for automotive investment amidst fierce global competition, increasing protectionism and geopolitical upheaval.”
Business Secretary, Peter Kyle, said:
“The UK is a top investment destination, and the SMMT’s leadership continues to highlight the scale of opportunity for investors to back our historic automotive industry and help secure the UK’s position as a thriving advanced manufacturing hub.
“Through our modern Industrial Strategy, we’re backing auto firms with the largest government investment in the automotive industry in the post-war era, helping to create tens of thousands of jobs and attracting billions in private investment through the DRIVE35 programme.”
Infographic courtesy of SMMT
