Risk to UK carmakers going slow on EVs as new sales figures show surge in France and Germany

• Majority (78%) of cars made in the UK are exported, with the EU by far the biggest market for UK-made cars.
• UK-based carmakers may rapidly lose market share to competitors unless they do more to imminently shift their businesses towards EV production.
• In a worst-case scenario, some 163,000 jobs across the UK economy could be lost, including 127,000 directly in and supported by the car industry and its supply chains.

New sales figures released this week show, for the second month running, over 40% of new cars sold in France [1], and more than one in three in Germany [2] were electric – underscoring the risk to UK carmakers that fail to adapt their businesses to meet demand for EVs in key export markets.  

While claims have been made that UK EV sales targets will damage the country’s car industry, new analysis from the Energy and Climate Intelligence Unit (ECIU) finds the far greater risk is a failure to keep up with EV demand internationally [3]. This is because the majority (78%) of cars made in the UK are exported, with the EU by far the biggest market for UK-made cars – making manufacturers particularly sensitive to market trends in countries like France and Germany. 

When modelling likely EV demand in these key markets against a range of scenarios, the analysis finds UK-based carmakers may rapidly lose market share to competitors unless they do more to imminently shift their businesses towards EV production. In a worst case scenario, some 163,000 jobs across the UK economy could be lost, including 127,000 directly in and supported by the car industry and its supply chains, with the West Midlands and the North East particularly vulnerable.

The report instead finds there are likely upsides to a rapid EV transition in UK car plants, with UK manufacturers potentially able to grow their market share in key export destinations if they act decisively to adapt their businesses towards growing EV demand now.  

Future of UK EV sales target still in question 

Global sales of internal combustion engine (ICE) cars peaked nearly a decade ago in 2017. The impact of US-Iran conflict on fuel prices is now also contributing to surging EV demand in the UK. In October, 32.3% of new cars sold in the UK were EVs [4], an increase on the previous month (28.3%), which itself was an increase of more than a third compared with September 2025 [5].

This appears to run counter to suggestions made by parts of the industry that annual target levels are “running ahead of demand” [6], given the ZEV Mandate target for 2026 is 33% of sales but also includes flexibilities. The car industry as a whole met the ZEV Mandate targets for the first two years of the policy in 2024 and 2025. [7] A Government consultation on the future of the ZEV Mandate closed in October, with an announcement expected this month.  

Matt Elliott, Lead Economic Analyst at the Energy and Climate Intelligence Unit, said: 

“We lost our car industry before by failing to move with the times and technologies. History is at risk of repeating itself, with customers in our main export markets increasingly likely to choose an EV for their next car, while at the same time some UK carmakers are still calling for a slowdown of UK ambition on EVs. 

“Let’s be very clear, with the vast majority of cars made in the UK being exported, the UK’s ZEV Mandate has very little to do with UK factories and jobs. Nevertheless, with EV sales going in one direction globally, the real risk is that UK-based manufacturers remain too slow to grasp the EV shift that is underway in many of their key markets. 

“Relaxing EV sales targets would not only signal the opposite of the Prime Minister’s stated aim of green reindustrialisation, it would also likely leave British families less of a choice of low-cost EVs as is already available in other countries.” 

The ECIU analysis finds that under a scenario where carmakers fail to switch enough of their production to EVs, in addition to job losses, the economic contribution (GVA) of UK car manufacturing would be £70bn lower over the next decade. 

However, in a scenario where the UK invested in a swift transition, an additional 182,000 jobs could be created (a difference of 345,000 compared to the worst case), of which 142,000 would be in and supported by the industry and its supply chains (a difference of 269,000 compared to the worst case), generating an additional £87bn in economic contribution (£157bn compared to the worst case). 

Conversely, EU demand for petrol and diesel cars is expected to fall by over 70% over the next decade (by 2035). If UK car factories maintained their current focus on non-EVs, they would have to quadruple their recent best market share of EU non-EV sales, just to maintain export volumes.  

Previous analysis from ECIU has found that the watering down of the ZEV mandate – which in effect would mean less availability and choice of EVs for UK customers – would add billions to the nation’s driving bill, as electric cars are on average hundreds of pounds a year cheaper to run. [8] 

Vicky Edmonds, CEO of EVA England, said: 

"More drivers are discovering that switching to an electric vehicle usually means lower running costs and less exposure to the rollercoaster of oil and petrol prices - something we saw last month with diesel hitting £2 a litre in the UK. As more new EVs enter the market, more affordable second-hand options also become available, helping growing numbers of British drivers access the benefits. 

"For British car manufacturing, this global EV sales surge is an opportunity: the stronger global demand for EVs becomes, the bigger the potential win for the industries and workers that make them. Supporting drivers to switch to EVs and supporting UK industry to compete in that growing global market are two sides of the same coin."