The UK automotive industry has urged the European Union to amend its planned Industrial Accelerator Act, warning that excluding Britain from key provisions could damage supply chains, investment and the wider transition to electric vehicles.
The Society of Motor Manufacturers and Traders (Society of Motor Manufacturers and Traders) is calling for UK-built vehicles, components and batteries to be granted equivalent status to EU-made products under the proposed “Made in Europe” framework, arguing that the current draft risks undermining a deeply integrated cross-border industry.
Industry representatives are making the case during meetings in Brussels, where they are pressing EU officials to recognise what they describe as the strategic interdependence of UK and European automotive manufacturing amid global competition and ongoing geopolitical uncertainty.
The automotive relationship between the UK and the EU is estimated to be worth around €80 billion annually, with trade flows heavily interconnected. The EU remains the UK’s largest export market for passenger vehicles, while the UK is also a major destination for European car exports, underscoring the scale of mutual dependence.
The SMMT argues that excluding UK firms from incentives linked to fleet electrification and emissions reductions—central to corporate purchasing decisions in the EU—could place British manufacturers at a competitive disadvantage at a critical stage in the industry’s transition to electric vehicles.
Such incentives include mechanisms designed to support low-emission fleets, which account for a significant share of new vehicle demand across Europe. Industry figures warn that restricting access could distort investment decisions, reduce production volumes and ultimately weaken supply chain resilience on both sides.
The group also highlights the importance of battery electric vehicle trade between the UK and EU, which has expanded significantly in recent years under the post-Brexit Trade and Cooperation Agreement. A large share of electric vehicles sold in the UK are imported from EU-based factories, while EU manufacturers remain heavily exposed to demand from the British market.
Analysts say the dispute reflects broader tensions over how post-Brexit regulatory frameworks interact with increasingly protectionist industrial policies in Europe, particularly as governments seek to secure domestic manufacturing capacity in strategic sectors such as automotive production.
While both sides have so far maintained tariff-free trade in vehicles and components, industry leaders warn that any erosion of mutual recognition or incentive access could have knock-on effects for investment, pricing and the pace of decarbonisation across the sector.
Mike Hawes, SMMT Chief Executive, said: “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.
“If the Industrial Accelerator Act proceeds as drafted, it threatens to reverse progress, undermining the Trade and Cooperation Agreement all sides worked so hard to deliver and jeopardise our respective competitiveness, damaging to jobs, investment and innovation.
“The EU and UK automotive sectors are highly integrated and a closer relationship is now compelled by the increasing uncertainties in the global environment. Instead of weakening our partnership, we must seize the opportunity to deepen collaboration and unlock the full promise of the TCA, ensuring the successful transformation of a globally competitive automotive industry.”
SMMT is calling on the EU to include the UK under its ‘Made in Europe’ framework, ensuring UK-built vehicles and components are considered equivalent to EU content across all aspects of the IAA.
It should also consider applying similar treatment to other like-minded trade partners. Rather than creating new trade barriers, both sides should build on last year’s Strategic Partnership to deepen industrial cooperation, increase supply chain resilience and strengthen trading relations.
The upcoming bilateral summit this summer is a critical opportunity to enhance and protect European automotive manufacturing capability, competitiveness and jobs, in line with international agreements and the EU-UK TCA.
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