New car production at UK factories fell by 20.6% in September as plants retool lines for all-new zero-emission vehicles.

UK factories are retooling amid the shift to electric cars

Output dropped to 70,039 cars, down by just over 18,000 units, but the Society of Motor Manufacturers and Traders (SMMT) said the decrease was largely expected as factories wind down production of current models amid the shift to electric cars.

This includes JLR, which stopped making the XE, XF and F-Type vehicles at its Castle Bromwich site in June to make way for its next-generation electric range. JLR is also radically transforming its 61-year-old factory in Halewood, Merseyside, into the “EV factory of the future” with a £500m investment to support production of electric Range Rovers, alongside existing combustion and hybrid versions.

The scale of the decline in UK output was also exacerbated by comparison with a strong September 2023, which posted the best result for the month since 2020.

Manufacturing for domestic and overseas markets both fell in September, down 20.8% and 20.6% respectively. The EU continued to take the lion’s share of exports, accounting for more than half (52.2%) of exports at 26,825 units, although volumes fell 28.6%.

Output for the first nine months of the year was down 10.2% to 659,901 units after a 6.5% rise in output for the UK failed to offset a 14.4% fall in overseas shipments.

Growth however is expected to return once new models come on stream. Forecasts for car and light van production are above one million units in 2027 and potentially over 1.3 million by 2030.

The SMMT said short-term production declines were always anticipated and represent a “temporary adjustment in exchange for long-term growth”.

But it’s called for action in the forthcoming Autumn Budget and Industrial Strategy to effect ambitious measures to bolster business confidence, attract investment and secure competitiveness.

This includes incentivisation of private consumer demand for battery electric vehicles in the Budget.

Earlier this month, the SMMT and 12 major vehicle manufacturers wrote to the Chancellor calling for urgent consumer support, as growth in private buyer demand for diesel outstripped EVs in September. They’d like to see the Government take action such as temporarily halving VAT on new EV purchases, scrapping the VED ‘expensive car’ tax supplement for ZEVs, due next year, and equalising VAT on public charging to match the 5% home charging rate. They also urged Rachel Reeves to maintain and extend the business incentives that are working, including Benefit-in-Kind and the Plug-in Van Grant.

The SMMT has also said that the funding secured within last year’s Advanced Manufacturing Plan should be reaffirmed; access to competitively priced low-carbon energy secured; and measures introduced to encourage investment, especially in the zero-emission powertrain supply chain and skills.