UK auto industry drives toward net zero with new government plans

The UK automotive industry is making strong progress toward a greener future, according to the 2025 Sustainability Report released by the Society of Motor Manufacturers and Traders (SMMT). Published in the wake of two major government policy announcements – the new Industrial Strategy and Trade Strategy – the report highlights both the achievements and challenges ahead for a sector central to the UK’s ambitions for sustainable, long-term growth.

With these government strategies placing automotive at their core, the sector is poised to play a pivotal role in rebuilding national competitiveness and delivering economic growth. But this progress is happening within the broader context of climate change, a global challenge the industry recognises as urgent and unavoidable.

The 2025 Sustainability Report, with signatories representing 97.8% of all Britain’s vehicle manufacturing, is the latest edition of the annual report published every year since it was launched in 2000, providing the definitive barometer of the industry’s long-term, year-on-year commitment to improving its environmental, social and economic performance.

The report details encouraging environmental gains across production and the marketplace. Energy used per vehicle produced fell by 2.4% in 2024, even as volumes declined. Tailpipe CO₂ emissions from new cars dropped by 6.2%, and UK vehicle plants generated a record 60.3 gigawatt hours of renewable electricity, an increase of nearly a third from 2023, cutting almost 12,500 tonnes of CO₂ from the industry’s footprint. These advances have been made possible through investment in solar panels, wind turbines, cleaner manufacturing processes, and net zero skills.

However, the report warns of mounting pressure as demand for clean energy accelerates. Electrified vehicles, which require more energy to produce, made up 35.4% of new car production last year. Yet grid connection delays, now averaging nearly 14 years, threaten to undermine this momentum. With the UK still facing the highest industrial electricity prices in Europe, Hawes urged rapid implementation of reforms outlined in the government’s Industrial Strategy. These include reductions in electricity costs and expanded eligibility for energy cost relief for automotive businesses, especially those investing in battery production and zero emission technologies.

The industry also welcomed the government’s commitment to publish a Circular Economy Strategy later this year, aimed at improving sustainability, boosting supply chain resilience, and reducing raw material dependency.

Despite the challenges, the report paints a picture of a sector determined to lead. With continued support, the UK automotive industry says it can build a globally competitive, low-carbon manufacturing base that creates jobs, drives exports, and supports the UK’s net zero targets.

“Our sector has already made huge strides, developing zero emission vehicles and technologies, decarbonising manufacturing processes, and investing in new skills,” said Hawes. “With cheaper energy costs and better grid connections for renewables, the industry can do even more, providing an internationally competitive low-carbon, lower cost manufacturing environment to deliver new jobs and growth across the UK.”