UK vehicle production in 2025 was the lowest seen since 1952, new figures from the Society of Motor Manufacturers and Traders (SMMT) reveal. However, a recovery is already underway, driven by electric cars.
A total of 764,715 cars and vans were built in the UK last year, a hefty 15.5 percent decline compared to 2024.
This was driven by a number of factors, including key model changeovers, the crippling JLR cyber-attack during the summer and the closure of Vauxhall’s van factory in Luton.
Car production fell by eight percent to 717,371 units – the lowest (excluding the pandemic period) since 1956. Van production also plummeted by 62.3 percent to just 47,344 commercial vehicles.
However, says the SMMT, there are already signs of a recovery, with Nissan finally beginning production of the new electric Leaf at its Sunderland facility in December, after assembly of the previous model stopped around a year ago.
This will give a significant boost to UK car production, with the trade body forecasting a 10 percent improvement to around 824,000 units in 2026 (790,000 of which will be cars).
Furthermore, “we can see a pathway to one million vehicles per annum by 2027,” said SMMT chief executive Mike Hawes.
This would be dependent on more new electric and electrified car launches, including the next Nissan Juke, the electric Range Rover and the highly controversial rebirth of Jaguar as an electric car brand.
Crucially, it wouldn’t depend on the arrival of a new car brand in the UK (despite recent speculation that Chinese giant Chery could use an existing JLR factory). It does, though, require trade certainty, meaning “no additional protectionist measures” from either the US or Europe.
The UK now has a trade deal with the US, allowing 100,000 tariff-free vehicles to be exported there each year. Hawes said the 100,000 target wasn’t met in 2025, due to the JLR shutdown, but should be “just about adequate” this year.
“Obviously, longer term, we would like to see trade with the US and the UK grown,” requiring an uplift of the tariff-free total. This is likely to be a focus of discussions in the coming years.
As for Europe, while the UK has a trade agreement (the Trade and Cooperation Agreement, or TCA), Hawes raised concerns around the EU’s latest ‘Made in Europe’ approach. This could require vehicles to be made in the EU to qualify for state incentives and other subsidies.
“These proposals could have the effect of delivering what Brexit didn’t deliver, and make it much harder for UK-produced vehicles to access to the European market,” said Hawes. “This is a significant threat to the industry.”
The hope is that, because the two regions have the TCA in place, ‘Made in Europe’ qualification will extend to UK-built vehicles. “We hope a degree of common sense will prevail.”
What’s more, new ‘Rules of Origin’ regulations are set to ramp up at the end of this year. From 1 January 2027, these require a high proportion of an electric car’s value, and 50-60 percent of its battery, to be made in the EU or UK – or the car faces a 10 percent tariff.
The deadline was pushed back in 2023 and, because battery production here hasn’t grown as quickly as expected, car makers are demanding the deadline be pushed back again. The EU, however, is currently playing hardball.
“We don’t want it to go back to Christmas Eve [before an agreement is reached],” said Hawes.
Trade deals are crucial for the car industry, as production in the UK remains export-driven. Nearly eight in 10 cars – that’s a total of 717,371 – were exported in 2025, with Europe taking by far the highest share of exports, at 56.7 percent.
The US was next, on 15 percent, with China in third place on 6.3 percent. All three markets were down, by 3.3 percent, 183 percent and 12.5 percent respectively.
Turkey was fourth, on 5.3 percent, followed by Japan, which took 2.9 percent of UK car exports.
The UK has since signed new trade agreements with India and South Korea, and there is hope that both regions might take a growing proportion of tariff-free, UK-built cars.
“The key to long term growth,” said Hawes, “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.”
Top 10 British-built cars for export
There was significant growth in the number of electrified cars – that’s EVs, plug-in hybrids and hybrids – that were built in the UK last year.
Production rose by 8.3 percent to almost 300,000, giving electrified cars a record 41.7 percent share.
With the production ramp-up of the new Nissan Leaf, along with other planned models, the SMMT is confident that more than half of cars built in the UK this year will be electrified.
The organisation, added Hawes, is currently unable to reveal the split between EVs, PHEVs and hybrids for compliance purposes. It is hoped this will change as UK car production becomes increasingly electrified.
The slump in UK van production is perhaps the most alarming aspect of the vehicle production figures. It is entirely down to the closure of Vauxhall’s plant in Luton, which generally produced around 90,000 vans each year.
Production has been consolidated at parent company Stellantis’ facility in Ellesmere Port, which was reopened a few years ago as a pure electric plant.
Last year, Stellantis’ UK production plunged from 105,000 vehicles to a mere 30,000 – a 71 percent decline.
A spokesperson told Motoring Research that the facility “currently builds electric-only Vauxhall Combo, Opel Combo, Peugeot Partner, Peugeot Rifter and Citroen Berlingo for the UK and export markets.
“We plan to start production of electric Vauxhall Vivaro, Peugeot Expert and Citroen Dispatch from next year.” It is hoped this will start to rally UK van production once again – although it has a long way to go in order to fully recover.
ALSO READ:
Motorists without driveways locked out of affordable EVs
UK Car of the Year 2026 contenders revealed
Regularly rapid-charging your EV can double battery decline
Toyota Tacoma named the official Truck of Texas for 2026
Unique 2026 Chevrolet Corvette ZR1X raises $2.6m for charity
A quarter of UK drivers suffered vehicle crime last year
Kalmar 7-97 Turbo Edition is a tribute to the classic Porsche 930
