UK car production slumps, while EV manufacturing surges in 2022

Global demand for UK made cars – top export markets 2022. Image credit: Society of Motor Manufacturers and Traders (SMMT)

The manufacturing output of British cars declined by 9.8 per cent in 2022 to 775.014 units in December, according to a report released by the Society of Motor Manufacturers and Traders (SMMT). 

The latest result rounds off a volatile year for UK car production, with output down by 17.9 per cent in the month after growth in October and November, with most of the year’s volume loss occurring in the first half. 

The annual total was 85,561 units down from 2021 and 40 per cent off the more than 1.3 million cars made in 2019 pre-pandemic, equivalent to a loss of more than half a million cars. 

SMMT attributed the slump in production to the crippling global shortage of semiconductors, which limited the ability to build cars. 

The depressed output also followed significant structural changes, reflecting a loss of production at two-volume manufacturing sites, and the impact of supply chain pauses in China due to lockdowns in the wake of the COVID-19 pandemic. 

However, despite these issues, UK factories reported a record 234,066 battery-electric (BEV), plug-in hybrid (PHEV), and hybrid electric vehicles (HEV), with combined volumes up 4.5 per cent year-on-year to represent almost a third of all car production. 

Total BEV output increased by 4.8 per cent with hybrid volumes up 4.3 per cent. 

Enhancing the output of these vehicles is a critical element in achieving net zero goals set by the UK and other major markets overseas, SMMT said in a press release

Since 2017, the value of BEV, PHEV and HEV exports has risen seven-fold, from GBP 1.3 billion (AUD 2.3 million)  to more than GBP 10 billion (AUD 17.4 million). 

“These figures reflect just how tough 2022 was for UK car manufacturing, though we still made more electric vehicles than ever before – high value, cutting edge models, in demand around the world. The potential for this sector to deliver economic growth by building more of these zero-emission models is self-evident, however, we must make the right decisions now,” said Mike Hawes, SMMT’s chief executive officer. 

“This means shaping a strategy to drive rapid upscaling of UK battery production and the shift to electric vehicles based on the UK automotive sector’s fundamental strengths – a highly skilled and flexible workforce, engineering excellence, technical innovation and productivity levels that are amongst the best in Europe,” Hawes said.