While the rest of the economy appears in the doldrums with high inflation and rising interest rates, the electric car business is sparking Britain’s car industry on the road to recovery.
Production is up for the fourth straight month
New figures say production rose for a fourth straight month in May, driven by higher demand for electric vehicles, according to an industry body.
The Society of Motor Manufacturers and Traders (SMMT) said 79,046 cars rolled out of factory gates in the UK last month, an increase of nearly 27% year-over-year. That is still 31.9% lower than the 2019 output levels.
The tackling of supply chain problems may have helped boost vehicle production in Britain’s car industry, but post-Brexit export rules are proving a headache.
Under the trade deal agreed upon when Britain left the European Union, the origin rule requires a rising proportion of electric vehicle parts to be made locally to qualify for the trade without tariffs, starting in 2024.
The rule has drawn criticism from several automakers as it will make these vehicles more expensive and that could hurt demand.
Hybrid electric vehicles, also surging
Combined hybrid electric, plug-in hybrid and battery electric vehicle volumes surged 95.4% in May to 27,636 units, and represented 35% of all cars produced during the time, SMMT said.
Exports accounted for 79.5% of the total output, SMMT said, with the EU remaining the biggest market.
The British car industry is still one of the country’s biggest employers and supports 782,000 jobs.
