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That was amid difficult trading conditions including the cyber attack at Jaguar Land Rover, which stopped production, the imposition of tariffs by the US and ongoing restructuring to support decarbonisation.
However, there was optimism from the industry, with new electric vehicle (EV) models entering production and expectations of a bounce back. “2025 was the toughest year in a generation for UK vehicle manufacturing,” said Mike Hawes, SMMT chief executive. “Structural changes, new trade barriers, and a cyber attack that stopped production at one of the UK’s most important manufacturers combined to constrain output, but the outlook for 2026 is one of recovery. The launch of a raft of new, increasingly electric models and an improving economic outlook in key markets augur well.
“The key to long-term growth, however, is the creation of the right competitive conditions for investment; reduced energy costs; the avoidance of new trade barriers; and a healthy, sustainable domestic market. Government has set out how it will back the sector with its industrial and trade strategies, and 2026 must be a year of delivery.”
In an op-ed, Hawes highlighted the fact that a record share of cars made in the UK were electrified – at 41.7% – but also mentioned the UK’s stubbornly high energy costs as a potential roadblock to growth. “We want the UK to be at the forefront of innovation and technology deployment,” Hawes wrote. “Symbolic of this is self-driving technology, and this week’s announcement that Waymo will be rolling out its automated taxis in London this September is a major win, ahead of any other European location. This will be a landmark moment, tangibly translating the ambition of the UK’s advanced regulatory framework into a social and mobility revolution.
“It underlines the real-world benefits that come when industry and government work together, aligning ambition and innovation – and 2026 can be the year the UK generates more momentum in its self-driving and EV transition, making our country more attractive for future investment.”
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Content published by Professional Engineering does not necessarily represent the views of the Institution of Mechanical Engineers.