The UK automotive industry is pressing the European Union to amend its proposed Industrial Accelerator Act to preserve an Eur80 billion ($94 billion) annual trade partnership that has flourished despite Brexit.
The Society of Motor Manufacturers and Traders said excluding British-built vehicles from the EU’s “Made in Europe” policy would harm manufacturers on both sides of the English Channel, disrupting supply chains and undermining the bloc’s industrial competitiveness goals. The lobby group made the appeal during meetings with EU representatives in Brussels this week.
The UK remains the EU’s largest export market for passenger cars, with trade worth Eur39.7 billion annually to European manufacturers. The EU also sells Eur9.1 billion of automotive components to Britain each year — more than to the US or China, according to SMMT data.
“The value of UK trade to the EU underlines why excluding the UK industry from the proposed Industrial Accelerator Act’s (IAA) ‘Made in Europe’ policy would inflict significant harm on both sides of the Channel, reducing output and supply chain demand, with consequences for consumer choice and affordability,” Mike Hawes, SMMT chief executive said April 17.
Under current IAA proposals, UK automotive products would be excluded from incentives linked to corporate fleet greening programs, which account for around 60% of the EU’s new car market. The policy also affects CO2 super credits that provide financial support for companies adopting zero-emission vehicles.
SMMT said preventing UK access to these incentives would reduce production volumes, constraining EU supply chain demand and leading to reduced consumer choice and higher prices. The organization warned the move would damage battery electric vehicle trade at a critical stage in Europe’s transition to cleaner mobility.
EU-UK trade in BEVs has increased tenfold since 2019, with 61.6% of electric cars sold in Britain imported from EU plants. EU-built BEVs account for nine in 10 models eligible for the UK’s Electric Car Grant, SMMT said.
The UK government this week published final details of the British Industry Competitiveness Scheme, BICS, designed to reduce industrial energy costs that rank among Europe’s highest. SMMT said the measure marked a significant step toward supporting the manufacturing supply chain.
Britain’s heavy goods vehicle market contracted 2.7% in the first quarter amid challenging economic conditions, while bus and coach demand fell by a third following two years of growth. Zero-emission vehicle adoption in the HGV sector declined to a 0.9% market share from 1.4% a year earlier, despite manufacturers offering more than 40 battery-electric models.
SMMT said operator confidence in zero-emission trucks depended on infrastructure development, requiring cross-sector collaboration.
The upcoming UK-EU bilateral summit this summer represents a critical opportunity to ensure British-built vehicles and components are considered equivalent to EU content under the IAA, SMMT said.
Author: Annalisa Villa
