A spike in exports enabled the UK’s automotive industry to record its best September for car production since 2020, as total output rose by 39.8% year on year.
A total of 88,230 cars left factory lines last month, according to new data released by the Society of Motor Manufacturers and Traders (SMMT).
Of these, 64,727 were exported – 32.2% more than in September 2022.
More than half of exports (37,563 cars) were delivered to European Union (EU) markets, an increase of 46.1% compared with the same period last year.
However, the SMMT has now warned that this crucial trade link could be under threat, owing to the introduction of new ‘rules of origin’ for electric vehicles (EVs) from 1 January 2024.
The rules require 45% of an EV’s value – and 60% of its battery pack – to have originated in the UK or EU. Each non-compliant car faces a 10% tariff, which, the SMMT warns, could add £3600 to the cost of an average UK-built EV being sold in the EU.
This tariff would make UK-built cars uncompetitive against EU-built alternatives, argues the SMMT.
Its chief executive, Mike Hawes, said the “first and urgent” step needed to safeguard UK automotive is to delay the rules of origin by three years. “This would give the necessary breathing space for automotive sectors on both sides of the Channel to scale up gigafactories and green supply chains, both of which are essential for a stable, long-term transition,” added Hawes.
Trade secretary Kemi Badenoch last week offered assurances that the UK would create its own rules of origin agreement if the EU “does not agree to what we think is the best solution”. She did not explain, or indicate, how this might work or benefit UK industry, however.
So far this year, 659,901 cars have left UK factories, up 14.9% compared with the end of September 2022.
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