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• New analysis reveals massive £4.6 billion opportunity for UK-based supply chain as manufacturers look to increase local sourcing.
• Batteries, electric motors and electronics will deliver much of the growth though exterior, interior, body and chassis components also in strong demand.
• News comes as SMMTlaunches campaign to promote UK sector’s strengths and opportunities worldwide.

The UK automotive industry could unlock a £4.6 billion boost to domestic manufacturing by the end of the decade, as car makers ramp up requirements for British-built components amid the transition to electric vehicles, according to new analysis published today by the Society of Motor Manufacturers and Traders (91ÖÆƬ³§¹ÙÍø).^1ÌýIt shows demand for UK sourced automotive parts rising by 80% to 2030, creating one of the biggest opportunities in a generation for investors to back and benefit from the domestic automotive supply chain.

Significant opportunities exist to support both next generation electric and other vehicle technologies, underlining Britain’s potential to remain a world class automotive manufacturing base, with the ambition to return to annual output of 1.3 million vehicles by 2035. DecemberÌý2025 saw theÌýstart of next generation volume battery electric car production in Sunderland and, with the planned launch of seven new EV models across the UK this year, BEV volumesÌýare anticipated to more than double by 2028.²

As a result, demand for electric motors, power electronics and drive systems (PEMD) is set to surge by more than 350% by the end of the decade, while automotive electronics demand is expected to more than double, driven by the increased use of displays (including head-up displays), wiring systems and computing power in modern electrified vehicles. There is also potential for increased battery-related localisation, demand for which is set to more than triple by 2030, with significant spending across battery packs, modules and cells, alongside supporting systems such as casings, battery management software and thermal management.

Existing automotive manufacturing remains central to the UK’s value proposition, with interiors, body structures, chassis and exterior components continuing to account for a large share of local supply chain output. High value opportunities remain in seat assemblies, interior and exterior plastics, pressings, castings and braking systems, while demand for internal combustion engine components remains substantial in high-performance engines, transmissions and exhaust systems.

While the UK’s supply chain offers huge potential, the growing connected and automated mobility (CAM) market also presents massive opportunities with a supportive regulatory framework facilitating the shift from testing to deployment. It is set to reach £24 billion by 2040, with driverless taxis already testing in London ahead of planned rollout later this year.³

The news comes as SMMTlaunches a new campaign – – showcasing the myriad opportunities and strengths of the UK’s advanced manufacturing sector to investors at home and globally. The campaign dovetails with the UK Government’s ambitions – set out in its recent Industrial Strategy, including the Advanced Manufacturing Sector Plan – as it seeks to strengthen domestic manufacturing, improve supply chain resilience and attract overseas capital into strategically important industries, notably automotive.

Opportunity AutoÌýfollows a period of significant public and private investment into the UK automotive manufacturing sector. Notably government’s Drive35 fund, now worth £4 billion, alongside major EV commitments across the country, including JLR’s £15 billion five-year strategy, Agratas’ £4 billion gigafactory and £2 billion for Nissan’s UK EV programmes.

This has been matched by billions more investment into the UK’s zero emission vehicle market, including Government grants for electric cars, vans and trucks together with manufacturer incentives, which has made the UK Europe’s second largest new car and BEV market.

Given conflict in the Middle East and geopolitical tensions, efforts are underway to foster ever more competitive conditions for UK manufacturing, driving down the cost of energy with the British Industrial Competitiveness Scheme, forging closer trading ties with key markets including the US, South Korea and India, and creating a strong and sustainable domestic market, given manufacturers build close to where they sell. 

Notes to editors

1. SMMTanalysis conducted in 2025
2. Based on independent production outlook produced by AutoAnalysis in March 2026 – cars only.