UK must attract investment to meet 1.3 million EV vehicle production ambition

29 September 2025

• Growth to just over 1 million vehicle production is expected by 2035, mainly driven by new model launches from OEMs. 

• Although BEV production is set to more than double between 2027 and 2035 in Europe, some OEMs are extending internal combustion engine (ICE) model lifecycles and ramping up investment in hybrids (HEVs) and plug-in hybrids (PHEVs) alongside their BEV offerings. 

• Recycling and end-of-life initiatives are gaining momentum across the vehicle value chain, focussing on critical materials in batteries and electric motors. 

According to the latest automotive demand forecast from the Advanced Propulsion Centre UK (APC), growth to 1 million battery electric vehicles (BEVs) manufactured per year by 2035 is expected to be driven by new model launches from established existing OEMs. However, to surpass current projections, the UK must continue to attract fresh investment for both introducing additional new models and bringing new manufacturers into the market to re-grow the industry to the Government’s target of 1.3m units per annum by 2035. 

Global vehicle production is expected to reach 100 million units by 2030, with just under 3 in 10 units having a (BEV) powertrain. 

Julian Hetherington, Automotive Transformation Director at APC, commented:  

“Although BEV production is set to more than double between 2027 and 2035, slow consumer uptake is forcing manufacturers to rethink their strategies in the near term. Many are extending internal combustion engine (ICE) model lifecycles for certain markets and continuing to invest in hybrids (HEVs) and plug-in hybrids (PHEVs) alongside their BEV offerings. Maintaining multiple powertrain platforms will impact costs and intensify affordability challenges. Trading and market conditions volatility (i.e. tariffs and market appetite) for exports to the US from the region are also a factor.  

“Some uncertainty around BEV production in the UK persists, with several manufacturers yet to confirm their local manufacturing plans. However, the UK is continuing to invest in the BEV supply chain, including gigafactory projects such as AESC in Sunderland and Agratas near Bridgewater, which are planned to have a combined capacity of over 55GWh, demonstrating a commitment to the UK’s automotive industry.” 

Dr Hadi Moztarzadeh, Head of Technology Trends, APC, added: 

“To achieve the UK ambition of recovering output to 1.3 million vehicles by 2035, production levels would need to nearly double those forecast for 2025, a pivotal year for the industry’s recovery. 

The launch of the government’s groundbreaking DRIVE35 programme is a vote of confidence for the UK automotive sector. This commitment from the government to secure advanced manufacturing in the UK is exactly what the industry needs.  

Innovation is key to helping the UK increase the volume of vehicles made in the UK to over 1.3 million cars and commercial vehicles by 2035. The recently announced Scale-up fund will help manufacturers to have a more coherent support across their funding and support journey to commercialise innovative solutions in the UK.” 

Read the latest demand report here 

Read our previous demand reports here