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Britain’s car industry has suffered its worst January for two years amid concerns about sluggish demand for electric vehicles (EVs) and the threat of US tariffs.
The number of cars produced last month fell to 78,012, compared with 98,811 a year earlier, according to the Society of Motor Manufacturers and Traders (SMMT).
Mike Hawes, the lobby group’s chief executive, warned that manufacturers were battling rising costs and uncertainty, particularly around demand levels for EVs and Donald Trump’s plans to slap tariffs on vehicles shipped to America. Some 80pc of cars made in the UK are destined for export.
Meanwhile, several car plants are being retooled for the electric era, meaning their output is lower than usual.
Others such as the Stellantis plant in Luton, Bedfordshire, are being wound down or closed altogether.
But the SMMT said “softening demand” for new cars in the UK and other key markets was also prompting some manufacturers to push back their plans for new models.
Its warning came hours after Aston Martin announced it would delay the launch of its first electric car from 2027 to an unspecified time later in the decade.
After years of slowing growth, total EV sales across Europe, including the UK, dipped by 1.3pc in 2024, according to data published by the European Automobile Manufacturers’ Association.
The decline came as the car market is struggling more broadly, with petrol and diesel sales suffering even larger declines.
But it has spooked the industry at a time when electric models are supposed to be the key growth opportunity and government targets are pushing manufacturers to sell ever-greater numbers of them.
In the UK, production of EVs, plug-ins and hybrids combined rose by 1.5pc to 30,028 cars in January. But the SMMT warned that “significant investments” were at stake if things did not improve.
It also contrasted January’s production numbers with a “bumper” month a year earlier.
Mr Hawes said: “UK vehicle producers face a perfect storm of global trade uncertainty, challenging manufacturing conditions and a market transition which is proving tougher than expected.
“The sector is doing all it can to keep production plans on track but needs government to ensure automotive is at the heart of its forthcoming industrial and trade strategies with promised funding invested as soon as possible.
“Doing so will help ensure our competitiveness and safeguard the billions of pounds of investment, jobs and economic growth which is now at stake.”
The warning comes as carmakers are pushing for the Government to water down the flagship zero emission vehicle mandate, which requires them to sell a growing proportion of electric cars.