British car manufacturers have called for an urgent review of electric vehicle targets and industrial energy costs following a sharp decline in production.
Output in the UK fell by 10.6 per cent in July to 61,767 vehicles compared with the same month last year, according to figures from the Society of Motor Manufacturers and Traders.
The industry body reported that year to date production is running 4.7 per cent lower at 433,523 cars.
Mike Hawes, the chief executive of the SMMT, said the decline was partly caused by regular summer factory shutdowns and model changeovers, but added that the situation was being compounded by weaker overseas demand and fierce global competition.
"July's figures underline the intense pressure under which UK vehicle manufacturers are currently operating," Hawes said.
Electric vehicle targets
The slump comes as the automotive sector struggles to meet government regulations requiring them to increase the proportion of electric models they sell in the country. Car makers face financial penalties if they fall short of the zero-emission vehicle rules.
One in four new cars sold in the UK this year has been an electric vehicle. This leaves manufacturers unlikely to meet the government target of 33 per cent by 2026. The mandate requires that target to rise to 80 per cent by 2030.
The government indicated earlier this month that it would water down the targets because consumer uptake has been slower than anticipated.
Despite the overall drop in output, the production of fully electric and hybrid models increased by 6.8 per cent in July to 25,678 units. These greener vehicles now account for more than four in ten cars built in the UK.
Energy costs and trade
Alongside the sales targets, the SMMT said manufacturers are struggling with industrial energy costs that are 60 per cent higher than those paid by rival companies in Europe.
The industry is also facing the prospect of new "Made in the EU" proposals from Brussels that threaten to make British vehicles uncompetitive on the continent.
Hawes said that while the rise in electrified vehicle production was encouraging, the long-term success of the industry relies on making the country a more competitive place to manufacture and sell cars.
"Meaningful and urgent reform of the ZEV Mandate, reduction of the UK's sky-high energy costs and negotiations to safeguard free and fair trade with our largest and closest export market are essential to put UK automotive manufacturing back on a path to growth," Hawes said.
