The United Kingdom auto industry is at a critical moment as it moves towards a era centered around electric cars (EVs). The Zero Emission Vehicle mandate, starting in 2024, demands 22% 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 manufacturing costs and low profits for manufacturers (Grant Thornton UK LLP) (EY).
Nonetheless, the sector is not without its hurdles. The sales of BEVs have recently experienced a decrease, in part due to the upcoming regulations automotive indutry and the costs they place on makers. Firms are adopting strategies like giga casting to cut production costs. Large-scale casting, previously employed by Tesla and several Chinese producers, eases the manufacturing process by casting large sections of the vehicle, which reduces both complexity and costs (Grant Thornton UK LLP).
In spite of these improvements, the industry encounters a precarious equilibrium. Rising price increases and borrowing costs, together with changing battery tech and potential tariff changes on non-EU BEVs, add to market volatility. Nonetheless, the commitment to renewable energy and creative manufacturing processes provides a promising outlook for the UK's automotive future as it shifts to a more environmentally-friendly system (Grant Thornton) (EY).