Electrifying growth

The UK’s automotive sector is crucial to the UK economy, contributing £46.8bn in GVA and supporting over 552,000 FTE jobs

• The UK automotive sector produced just over a million total motor vehicles in 2023.[1] Within this, non-BEVs containing internal combustion engines (HEVs, PHEVs, dieseland petrol vehicles) still constitute the vast majority (93%) of UK vehicle production.The remaining 7% of UK vehicle production is comprised of BEVs as the UKmanufactured an estimated 74,700 in 2023.
• Just over a fifth (21%) of vehicles produced in the UK are sold in the UK. Theremainder are exported with approximately a third going to the EU, 15% going to the US and 9% to China. The remainder are sold across various different global markets.
• When taking into account the activity of automotive manufacturers and their widereconomic contributions, the automotive sector contributed a total £46.8 billion to theeconomy in GVA – greater than the total economic contributions of Northern Ireland.
• The sector also supported employment totalling over 552,000 FTE jobs. The138,000 FTE jobs created by the activity of automotive manufacturers (excludingsupply chain and wider economic impacts) had an estimated average salary of£37,489, 13% higher than UK average full-time salary.[2]
• Based on the total economic contribution, the automotive sector is shown to have avery strong multiplier effect. For every £1 of initial GVA, an additional £2.26 of GVA isgenerated in the wider economy. Likewise, for every job created directly in theautomotive sector, a further 3.1 jobs are created elsewhere in the UK economy.

BEVs will be fundamental to the future prosperity of the UK automotive sector, which could vary in size by up to £50 billion in GVA[3]

The automotive sector and the BEV production sub-sector of this were forecasted between 2024 to 2035, under four different scenarios. Scenarios were fundamentally driven by variation in future demand for BEVs, ranging from more optimistic ‘maximalist’ and ‘baseline’ scenarios, where the industry moves quickly in transitioning to the manufacturer of electric vehicles, to the ‘pessimistic’ and ‘worst case’ scenarios, where the transition to BEVs is slower.

• Total GVA contribution of the UK automotive sector could rise by 35%, or £16.1billion, under a maximalist scenario, or decrease by 73%, or £34.1 billion, under aworst case scenario. There is a staggering GVA difference between these twopotential scenarios of over £50 billion – greater than the current automotive sector’scontributions.
• FTE employment contributions are forecast to change by similar margins, with theautomotive industry estimated to support 167,000 more FTE jobs by 2035 in amaximalist scenario and 404,000 fewer FTE jobs by 2035 in a worst case scenario.