The UK automotive supply chain could unlock an additional £4.6 billion in domestic manufacturing value by the end of the decade, as vehicle makers increase demand for British-built parts during the shift to electrification, according to new analysis from the Society of Motor Manufacturers and Traders (SMMT).
The trade body said demand for UK-sourced automotive components is forecast to rise by 80% by 2030, creating what it described as one of the biggest opportunities in a generation for investors looking to back the domestic supply chain.
The findings come as SMMT launches its Opportunity Auto campaign, designed to promote the strengths of the UK automotive sector and attract investment from both domestic and international backers.
EV supply chain growth
Much of the projected growth is expected to come from batteries, electric motors, power electronics and wider vehicle electronics, reflecting the rapid expansion of EV production in the UK.
SMMT said demand here is expected to rise by more than 350% by 2030, while demand for automotive electronics is set to more than double as electrified vehicles require more displays, wiring systems and computing capability.
Battery-related localisation also represents a major opportunity – expected to more than triple by the end of the decade – with spending potential across battery packs, modules and cells as well as casings, battery management software and thermal management systems.
The analysis also points to continued demand across more traditional areas of vehicle manufacturing, including interiors, body structures, chassis and exterior parts.
SMMT said high-value opportunities remain in seat assemblies, plastics, pressings, castings and braking systems, while internal combustion engine components will still see substantial demand in specialist areas such as high-performance engines, transmissions and exhaust systems.
SMMT pointed to the start of next generation volume battery electric car production in Sunderland in December 2025 and noted that seven new EV models are due to launch from UK plants this year. As a result, BEV production volumes are expected to more than double by 2028.
Alongside this, the organisation reiterated the wider ambition for the UK to return to annual vehicle output of 1.3 million units by 2035.
Mike Hawes, SMMT chief executive, said: “The UK automotive sector is transforming at pace, and for companies looking to invest in Britain the opportunities are clear. We have the skills, the innovation and the industrial base built on the billions already invested into Britian by global brands. With a modern, long term industrial strategy – with automotive at its heart – the UK is a safe and stable destination for automotive investment amidst fierce global competition, increasing protectionism and geopolitical upheaval.”
Campaign targets investors
SMMT said the Opportunity Auto campaign aligns with the Government’s industrial strategy and advanced manufacturing sector plan, both of which are intended to strengthen domestic manufacturing, improve supply chain resilience and attract overseas capital into key industries including automotive.
The campaign follows a period of major investment across UK automotive manufacturing. SMMT highlighted the Government’s £4 billion Drive35 fund, JLR’s £15 billion five-year strategy, Agratas’ £4 billion gigafactory investment and Nissan’s £2 billion commitment to UK EV programmes.
It also said the connected and automated mobility market offers further long-term potential, with the UK market projected to be worth £24 billion by 2040. Driverless taxis are already being tested in London ahead of a planned rollout later this year.
SMMT said efforts to improve the UK’s attractiveness to manufacturers are becoming more important against a backdrop of Middle East conflict and wider geopolitical tension. These include attempts to lower industrial energy costs, strengthen trading relationships with markets such as the US, South Korea and India, and support a more robust domestic market.
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