UK vehicle manufacturing suffered its worst year in a generation in 2025, with production plunging 15% amid cyber attacks, new trade barriers and industry restructuring. Yet the sector's trade body predicts a strong recovery in 2026 driven by new electric models and improving markets.
The country produced 717,371 cars and 47,344 commercial vehicles last year. Car production fell 8%, while commercial vehicle output collapsed 62%. The UK exports most vehicles to Europe (56%), the United States (15%) and China (6.3%).
The decline stemmed from multiple challenges. A cyber incident at JLR, one of the UK's largest manufacturers, halted production. New tariffs on transatlantic trade created additional barriers. Plants continued restructuring as the industry transitions toward decarbonization.
Despite the overall decline, battery electric, plug-in hybrid and hybrid vehicle production surged 8.3% to nearly 300,000 units. These vehicles now account for 41.7% of UK output, signaling the industry's shift toward electrification.
Recovery outlook
The Society of Motor Manufacturers and Traders expects production to grow more than 10% in 2026. Seven new electric vehicle models are planned for launch this year.
SMMT chief executive Mike Hawes said in the report: «2025 was the toughest year in a generation for UK vehicle manufacturing. Structural changes, new trade barriers, and a cyber attack that stopped production at one of the UK's most important manufacturers combined to constrain output, but the outlook for 2026 is one of recovery. The launch of a raft of new, increasingly electric models and an improving economic outlook in key markets augur well. The key to long-term growth, however, is the creation of the right competitive conditions for investment, reduced energy costs, the avoidance of new trade barriers, and a healthy, sustainable domestic market. Government has set out how it will back the sector with its industrial and trade strategies, and 2026 must be a year of delivery.»
Note: This article was created with Artificial Intelligence (AI).
