Annual UK vehicle production to hit 1.2 million by 2035, new analysis reveals

Posted on 20 Jan 2025 by The Manufacturer

The UK is largely expected to hit 2035’s predicted production volumes, specifically zero-emission vehicle (ZEV) production, a new analysis shows.

According to the latest Advanced Propulsion Centre UK (APC) quarterly demand report, with legislation looming to ban the sale of fossil-fuel internal combustion engines (ICE) in the UK by 2035, the demand for battery electric vehicles (BEVs) will increase.

However, while the forecast maintains previously reported 2035 figures, the increase in demand will be slower than previously anticipated, with global forecasts for 2027 and 2030 reducing by 14 per cent and 12 per cent respectively. In the short term, the demand for electric hybrids is where we will see increased growth, especially in Europe, but this will eventually give way to an increased appetite from consumers for BEVs. This increase indicates the importance of new investment with the development of battery-cell chemistries continuing at pace.

Julian Hetherington, Automotive Transformation Director at the APC, said: “While it has been a turbulent 12 months in terms of geopolitical and economic events affecting the global automotive market, including the UK and especially our main export markets in Europe, it is reassuring to see our predicted figures for 2035 largely on track towards our prior forecast position in the Q1 demand report 2024, acknowledging some near-term reductions reflecting market conditions.

“Aligned with the continuing demand for BEVs, we are also observing advances and innovations in battery chemistries, in particular the adoption of lithium-iron-phosphate (LFP) batteries, primarily driven by their cost-effectiveness and ease with which system-level safety performance can be achieved. Our forecasts indicate up to a 30 per cent chemistry share for LFP across Europe, with up to a 25 per cent share here in the UK by 2035. Globally, our analysis points to this being as high as nearly half of all BEVs, at a 45 percent share.

“Because of this increased appetite for LFP chemistries, there is a focus within the report on the UK’s competitiveness for LFP and lithium-manganese-iron-phosphate (LFMP) cells. Understanding this pull, and the potential for LFP and LFMP, highlights the importance of investment in the battery value chain for these chemistries both now and in the future.”

For an in-depth look at future battery developments for the automotive industry to 2040, see APC’s Electrical Energy Storage Roadmap.

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