The UK’s car industry has warned European leaders that new policies could shut British-made vehicles and parts out of major incentive programs – threatening jobs and investment on both sides of the channel.
The Society of Motor Manufacturers (SMMT) says the EU’s proposed Industrial Accelerator Act could damage both UK and European economies. The trade group is pushing for changes to the Made in Europe requirements.
The Industrial Accelerator Act aims to strengthen Europe’s car manufacturing against cheap Chinese imports.
Under current proposals, vehicles built in Europe using European-made batteries and motors would qualify for state grants, tax breaks and additional CO2 trading credits.
British-made cars and components wouldn’t be eligible.
The SMMT argues this creates unfair disadvantages for UK manufacturers. Reduced production volumes would hurt EU supply chains while driving up prices for consumers.
Trade Relationship at Risk
The numbers highlight how intertwined UK and EU car markets remain. The UK is the EU’s biggest export market for passenger cars – and the reverse is also true.
Nine out of 10 cars eligible for the Electric Car Grant come from EU factories.
About 61% of all electric vehicles sold in the UK are imported from European plants. Despite Brexit disruptions, EU-UK trade in battery electric vehicles has grown under current tariff-free arrangements in the Trade and Cooperation Agreement.
Both regions are shifting toward all-electric futures. The SMMT says trade barriers would slow this transition.
“Brexit put the resilience of our shared industry under enormous stress but manufacturers have overcome those challenges to grow our trade in electrified vehicles alone to record levels,” said Mike Hawes, SMMT chief executive.
Hawes warned the Industrial Accelerator Act could reverse recent progress. He said it threatens to undermine the Trade and Cooperation Agreement and damage competitiveness on both sides.
“Instead of weakening our partnership, we must seize the opportunity to deepen collaboration and unlock the full promise of the TCA.”
Manufacturing Jobs Under Pressure
The policy threatens specific UK facilities. Nissan reportedly warned earlier this year that the Industrial Accelerator Act could put its Sunderland plant’s future at risk.
The factory currently builds the Leaf electric vehicle. Production of the new Juke EV is set to begin later this year.
Sources indicated that exclusion from Made in Europe incentives would threaten the viability of UK production. The plant employs thousands of workers in northeast England.
The dispute comes as both the UK and EU face pressure from Chinese automakers offering electric vehicles at significantly lower prices than European alternatives.
European policymakers designed the Industrial Accelerator Act to help domestic manufacturers compete. However, the SMMT argues that excluding the UK weakens rather than strengthens Europe’s overall position in the global market.
