On Thursday, 29 October 2026, in London, the SMMT issued a warning that European Union trade measures could hamper the United Kingdom's projected vehicle production recovery, according to a statement reported by Xinhua. The society said that EU “Made in EU” proposals would, in their current form, effectively exclude UK‑built cars from the EU, Britain’s largest export market, and that stricter rules of origin starting in 2027 could impose tariffs totaling £1.4 billion ($1.9 billion) annually on two‑way electric vehicle trade.
SMMT Production Forecast
The SMMT pointed to an independent industry outlook that expects annual vehicle production to decline this year before rising to 752,000 units in 2027, driven mainly by new electric vehicle models entering production. The forecast notes that exports accounted for more than three‑quarters of British vehicle production in September, with 57.5 percent of those exports going to the EU.
According to the society, the forecast’s decline in 2026 is attributed to supply‑chain disruptions and the shift toward electric models, while the 2027 rebound is largely expected from increased electric vehicle output. The SMMT also warned that the timing of the tariffs, coinciding with the EU’s staggered roll‑out of green vehicle standards, could amplify pressure on manufacturers.
The automotive sector provides approximately 2 percent of UK GDP and employs around 260,000 workers. The society said that any trade friction imposed by the EU could threaten not only factories but also research, design and procurement chains that integrate the UK with continental suppliers.
In addition to the tariff concerns, the SMMT highlighted that unrealistic domestic electric vehicle sales targets are putting manufacturers under acute pressure, eroding profitability, diverting resources and undermining the attractiveness of the UK as an investment hub.
Recognizing these threats, the society called the upcoming EU‑UK Summit a vital opportunity to agree pragmatic solutions and safeguard the 80‑billion‑euro (≈90 billion USD) trade relationship between the two economies.
The summit will be held at the European Union’s Brussels headquarters in early November 2026, where UK and EU trade negotiators will meet. The SMMT officials hope to secure guarantees that UK‑built vehicles will retain a place within EU supply chains and that any tariffs on electric vehicles will be limited.
Through this event, the society urges manufacturers to re‑evaluate supply‑chain dependencies and advocate for an exemption mechanism in the Trade Cooperation Agreement, aiming to preserve the UK’s competitive edge in the global automotive market.
