The United Kingdom auto industry is at a critical moment as it moves towards a era dominated by EVs (EVs). The ZEV mandate, coming into effect in 2024, demands twenty-two percent of all passenger cars sold to be emission-free vehicles, with 10% for light commercial vehicles. This regulatory initiative is expected to greatly expand the market share of BEVs (BEVs), in spite of existing challenges such as high production costs and low profits for manufacturers (Grant Thornton UK LLP) (EY).
Nonetheless, the sector is not without its hurdles. Sales of BEVs have recently experienced a decrease, in part due to the impending regulations and the financial burden they place on producers. Firms are implementing approaches like giga casting to reduce production costs. Giga casting, currently utilized by Tesla and several Chinese producers, eases the production process by forming large sections of the vehicle, which reduces both complexity and costs (Grant Thornton UK LLP).
Despite these improvements, the industry encounters a precarious balance. Rising inflation and interest rates, together with changing battery technologies and potential tariff changes automobile industry on non-EU BEVs, add to market volatility. Nevertheless, the commitment to renewable energy and innovative manufacturing processes provides a promising outlook for the UK's automotive industry as it shifts to a more environmentally-friendly system (Grant Thornton) (EY).