Q1 2026 Automotive industry demand forecast

The data in this report has been collated by the Advanced Propulsion Centre UK (APC) based on insight gathered from UK original equipment manufacturers (OEMs) as well as forecasts from S&P Global AutoTech Insight, Rho Motion, BloombergNEF (BNEF), Wood Mackenzie, Global Data and KGP Powertrain Intelligence.

It reports that achieving the UK ambition of recovering output to 1.3 million vehicles by 2035 would require nearly doubling the production levels achieved in 2025. 

The target remains below pre-Brexit and pandemic production levels, with current forecasts indicating that production may reach circa 1 million vehicles by 2035.  

Globally, battery demand has been revised slightly upward in the near term but softened in the medium to long term.

There are weaker expectations in heavy-duty and passenger car segments outweighing modest adjustments elsewhere, resulting in a marginally lower long-term total outlook.  

Higher BEV and electric truck sales are boosting battery demand in the short term, but slower vehicle market growth and stronger demand for hybrids are reducing long-term battery demand.