NAA Update: Current challenges for UK automotive include the European Commission’s proposed Industrial Accelerator Act
UK vehicle manufacturing entered 2026 under significant pressure, and the European Commission’s proposed Industrial Accelerator Act has emerged as a major cause for concern.
Welcome to this month’s newsletter, and I hope you are all keeping well.
UK vehicle manufacturing entered 2026 under significant pressure, with January output affected by weaker export demand outside Europe and a sharp contraction in commercial vehicle production. Our sector’s reliance on overseas markets remains pronounced, with more than three‑quarters of UK‑built vehicles destined for export, underscoring the need for stable, competitive and forward‑looking trade relationships. Electrified vehicle production fell by 10% for the month, but still accounted for two in five vehicles, and volumes are expected to strengthen as next‑generation EV manufacturing ramps up in UK plants alongside a series of new model launches.
The European Commission’s proposed Industrial Accelerator Act has emerged as a major cause for concern. Its ‘Made in Europe’ provisions would exclude UK‑built vehicles and components from key incentives, potentially breaching the EU‑UK Trade and Cooperation Agreement and threatening a trading relationship worth nearly £70 billion annually. Such measures risk placing UK manufacturers at a systemic disadvantage in their largest export market. Finding a resolution by extending full, trusted partner status to the UK automotive sector is vital for the delivery of economic growth and security for our sector, which is why the UK government and European counterparts must work together, urgently, to resolve the situation.
Meanwhile, UK new car demand shows signs of recovery, with February registrations up 7.2%, the highest volume for the month since 2004 though EV uptake continues to lag behind the ZEV Mandate targets for both cars and vans. With further policy pressures ahead, including a pay‑per‑mile EV tax from 2028, a holistic review of the UK’s transition to zero‑emission mobility is increasingly necessary.
Elsewhere, on a more positive note, could your business be a King’s Award winner? His Majesty’s Lord-Lieutenant of Lancashire invites you to join her for a dedicated information and inspiration event designed for ambitious Lancashire businesses considering an application for the King’s Awards for Enterprise – the UK’s most prestigious official business honour.- see link here for further information The King’s Awards for Enterprise | LCC Events
Moving on to the membership side, we would like to welcome one new member:
The Electric Van Company – delivers innovative, sustainable commercial mobility, led by the agile EVC CitySprint – engineered for efficiency, reliability and urban performance and purpose-built in Lancashire.
We are looking forward to working with each of these new members and welcoming them to our ongoing networking event programme during the course of this year.
Paul Jones
NAA CEO
