The UK automotive sector could deliver a £4.6 billion uplift to domestic manufacturing by the end of the decade, according to new analysis from the Society of Motor Manufacturers and Traders (SMMT).
The increase is being driven by car makers’ growing requirements for British-built components as the industry accelerates its transition to electric vehicles (EVs).
Demand for UK-sourced parts is expected to rise by 80% by 2030, presenting one of the largest investment opportunities in a generation for those looking to support the domestic supply chain.
Next-generation electric and other vehicle technologies are at the heart of this growth, highlighting Britain’s potential to maintain its status as a world-class automotive manufacturing hub.
The SMMT aims to return the UK to an annual output of 1.3 million vehicles by 2035.
Production of next-generation volume battery electric cars began in Sunderland in December 2025, with seven new EV models set to launch across the UK this year. Battery electric vehicle volumes are expected to more than double by 2028, fuelling demand for electric motors, power electronics, and drive systems — projected to increase by over 350% by 2030.
The report also points to a sharp rise in demand for automotive electronics, including displays, wiring systems, and vehicle computing power, which is expected to more than double. Local battery production is set to increase threefold by 2030, encompassing battery packs, modules, cells, and supporting systems such as casings, management software, and thermal management solutions.
While electrification drives much of the growth, traditional automotive manufacturing continues to play a crucial role. Interiors, body structures, chassis, and exterior components account for a large share of local supply chain output, while high-performance internal combustion engine components, transmissions, and exhaust systems remain in strong demand.
The growing market for connected and automated mobility (CAM) presents additional opportunities, with the sector projected to reach £24 billion by 2040. Driverless taxis are already being trialled in London, with a wider rollout planned later this year.
Mike Hawes SMMT Chief Executive, said, “The UK automotive sector is transforming at pace, and for companies looking to invest in Britain the opportunities are clear. We have the skills, the innovation and the industrial base built on the billions already invested into Britian by global brands. With a modern, long term industrial strategy – with automotive at its heart – the UK is a safe and stable destination for automotive investment amidst fierce global competition, increasing protectionism and geopolitical upheaval.”
Business Secretary Peter Kyle, said, “The UK is a top investment destination, and the SMMT’s leadership continues to highlight the scale of opportunity for investors to back our historic automotive industry and help secure the UK’s position as a thriving advanced manufacturing hub.
“Through our modern Industrial Strategy, we’re backing auto firms with the largest government investment in the automotive industry in the post-war era, helping to create tens of thousands of jobs and attracting billions in private investment through the DRIVE35 programme.”
The findings coincide with the launch of SMMT’s “Opportunity Auto” campaign, designed to highlight the strengths of the UK’s advanced manufacturing sector and attract both domestic and international investment. The campaign supports the UK Government’s Industrial Strategy and Advanced Manufacturing Sector Plan, aimed at strengthening domestic manufacturing, improving supply chain resilience, and boosting foreign investment.
The report comes amid significant public and private investment, including the government’s £4 billion Drive35 fund, Jaguar Land Rover’s £15 billion five-year strategy, Agratas’ £4 billion gigafactory, and Nissan’s £2 billion UK EV programme.
UK policymakers are also seeking to make domestic manufacturing more competitive in the face of geopolitical uncertainty, including conflicts in the Middle East. Initiatives include reducing energy costs via the British Industrial Competitiveness Scheme, strengthening trade ties with key markets such as the US, South Korea, and India, and promoting a sustainable domestic market focused on local production for local sales.
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