The UK car industry experienced its weakest January in two years , with production falling to 78,012 units , down from 98,811 in the same month last year, according to the Society of Motor Manufacturers and Traders (SMMT) . The decline comes amid concerns over sluggish demand for electric vehicles (EVs) , rising manufacturing costs, and uncertainty surrounding potential US tariffs on UK-made cars. With 80% of UK vehicles destined for export , trade policies and global market conditions remain critical factors for the industry. Several car plants are undergoing retooling to prepare for EV production, temporarily reducing output. Others, such as the Stellantis plant in Luton , are winding down operations or closing entirely. The SMMT also pointed to softening demand in key markets as a reason for manufacturers delaying new model launches. Across Europe , total EV sales declined by – 1.3% in 2024 , despite government targets encouraging greater adoption. In the UK, production of EVs, plug-ins, and hybrids saw a modest 1.5% increase , reaching 30,028 units in January. However, the SMMT warned that further investment in the sector could be at risk if demand does not improve. The slowdown comes as carmakers push for adjustments to the UK’s zero-emission vehicle mandate , which requires an increasing share of new cars sold to be electric. While the 2025 target stands at 28% , manufacturers have called for greater flexibility, warning that without changes, investment and jobs in the UK automotive sector could be affected .