The UK automotive industry has attracted approximately £20 billion in private investment in 2023, according to the latest calculations by the Society of Motor Manufacturers and Traders (SMMT).

The trade association said the total means that this year has seen more investment announced than in all the years back to 2016 combined.

On top of industry’s backing for new and upgraded R&D and manufacturing facilities, last week the government committed a further £2 billion for the sector, backed by an Advanced Manufacturing Plan and battery strategy.

With almost a million people directly relying on the sector for their livelihood, and millions more benefiting from the mobility it provides, the ‘importance of the UK automotive industry to the economy has never been more evident’, the SMMT said.

Addressing industry leaders and politicians at the SMMT’s 106th Annual Dinner in London, Alison Jones, SMMT President and Senior Vice President Global Circular Economy, Stellantis, praised the industry’s resilience and commitment to green growth. She said: “As an industry, we have moved forward despite the instability, despite legislative uncertainty, inflation and geopolitical risk. The industry has backed itself with big decisions on big investments to guarantee jobs and our future. We have seen major commitments in battery production, lithium mining, vehicle manufacturing, R&D and the aftermarket. Such investment – and our ability to remain competitive – is key to the continuation of a strong UK manufacturing base and a sector that sustains nearly a million livelihoods.”

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However, the SMMT also warned that the industry’s potential to drive economic growth will be diminished without a deferral of upcoming Rules of Origin on UK-EU trade. From 2024, the rules – as they stand – are tightened, which will be an issue for electric vehicles. It said tariffs would throttle trade in electric vehicles between the UK and EU.

The UK government and most major European nations recognise the dangers of inaction and have called for a common sense solution to ensure the free and fair flow of EVs between the UK and EU. However, the SMMT said ‘time is running out to secure a deal before the end of year deadline’.

Mike Hawes, SMMT Chief Executive, said: “The industry is betting big on Britain, and government has rightly recognised the value that automotive manufacturing brings to the UK, backing our industrial transformation.

“These investments are, however, predicated on a strong domestic market. Incentives for business buyers must be matched with support for private buyers to ensure the maximum return on every penny already pledged to production. The prize for success will be a faster and fairer decarbonisation of Britain, ensuring millions have access to zero emission mobility.”

Last week, Nissan confirmed that it will make two new fully electric models – in addition to the Leaf – at its Sunderland plant in northeast England. There was also confirmation earlier this year that BMW will invest to make electric vehicles at its UK MINI brand plant.