UK vehicle production slumps to lowest level since 1953 amid tariff uncertainty and EV grant confusion

The production of cars and cars in the UK has decreased to its lowest level since 1953 – which precedes the closure of the epidemic – six months after the auto sector, which is unknown to US tariffs, the closure of the factory and the confusion about the granting of new electric cars (EV).

The numbers released by the SMMT Factors Association (SMMT) shows that the output of the car decreased by 7.3 % in the first half of the year, while truck production decreased by 45 %, partially driven by the closure of the Loton Factory in Foxhol.

The recession leaves the UK car industry at its weakest point in seven decades, despite the average rise in June after the implementation of a long -awaited US tariff deal that reduced the customs tariff for vehicles created in the United Kingdom to America from 27.5 % to 10 %.

Mike Hazi, CEO of SMMT, described the characters as “frustrating” and said he hoped the first half of 2025 is “rare” for industry. However, it has warned that the UK is unlikely to return to its production of 2021 million cars annually by the end of the contract.

“The government’s 2035 goal of 1.3 million cars per year is an ambition of what we are in,” he said. “It is clear that we need at least one, if not two, the new participants to enter the UK production to achieve it.”

One of the luminous points was the production of electric vehicles, which increased by 1.8 %. Electrical and hybrid models and additional components are now more than one of every five cars produced in the United Kingdom.

However, SMMT has raised concerns about the lack of clarity about the government’s new EV grant scheme, which offers up to 3,750 pounds for cars at a price of less than 37,000 pounds. While the incentives were welcomed, eligibility standards remain transparent.

Grants will be granted based on the carbon imprint of the car and its battery during production, and only for manufacturers with targets based on science-but the government has not yet published clear thresholds.

“The difficulty is, we do not know. No one knows – not even the government – really knows the models where the brands will qualify.” “Your agent cannot tell you whether the model you think is eligible.”

He warned that with the fact that September is the second largest month for new auto records, there was an urgent need for clarity.

A spokesman for the Transport Administration said that dozens of models are expected to qualify for the new grant and that 650 million pounds will be granted in financing on the basis of who comes first serving first. The government said it was closely involved with manufacturers and published instructions to support requests.

The United States is the second largest export market in the UK vehicles, and many manufacturers have stopped or produced production earlier this year amid uncertainty about President Trump’s policies that have turned into tariff policies.

The new US tariff agreement, which entered into force on June 30, had already had a small positive impact on the June production numbers, according to SMMT. However, Hawes emphasized that the continuous recovery will require long -term stability and greater political clarity, especially about EV policy.

With the acceleration of electrical transmission worldwide, the UK risks backwardness unless it can attract new investments in batteries production, gigafactories, and local assembly.

“We see standard production shares, which is a sign of strength. But the basics are fragile,” he said. “We need certainty, ability and competitive conditions to turn refreshment to growth.”

While the government is still optimistic that its EV giving its commercial status will provide a big boost, the SMMT warning draws a flagrant image of a crossroads – between global opposite winds and delay in local policy, and the urgent need for momentum.