“Existential Threat” – SMMT Boss Mike Hawes Doesn’t Hold Back on UK Auto Industry Crisis
Some speeches are polite, PR-friendly affairs filled with vague optimism and corporate buzzwords. Not this one. Mike Hawes, Chief Executive of the Society of Motor Manufacturers and Traders (SMMT), came out swinging at SMMT Test Day 2025 with what felt more like a rallying cry for survival than a standard industry update. “The industry faces an existential threat,” Hawes warned. And if that sounds dramatic — well, good. It should. Because the message he delivered was clear: the UK automotive sector is on a cliff edge, and we’re running out of road fast.
Falling Production, Vanishing Exports & EV Anxiety
“Last year was challenging,” Hawes admitted, with UK car production dropping around 13–14%. And this year? Not looking much better. The shift to electric vehicle (EV) manufacturing isn’t a simple model refresh – “you have to invest in a new plant, new machinery, totally new technology.” That’s massive cash outlay, long lead times, and dwindling margins.
On top of that, he pointed to global instability and sagging demand across Europe. “We’ve obviously lost Honda at Swindon,” he noted. “And what we’re seeing globally is a drop in demand for vehicles.” That’s a death sentence for an industry still exporting 80% of its output – with 60% headed for Europe and a crucial chunk to the US.
And speaking of the US, Hawes didn’t mince words about the Trump tariffs: “When Trump announced the tariffs… orders stopped overnight.” That 2.5% import duty jumped to a crippling 27.5%. “If you’re a high-net-worth individual… you’re not going to spend that. You’ll wait. You’ve got seven or eight cars in the garage.” As a result, Hawes said, “Getting a deal was absolutely vital for the industry.”
“Unsustainable” EV Push – £4.5 Billion Spent to Buy Demand
Let’s talk EVs – because Hawes certainly did. And he was blunt.
“We spent £4.5 billion last year to try and get the level of demand for EVs from 12% to 19.5%. That seven-and-a-half percent cost £4.5 billion. That is unsustainable.”
That statement alone should send shockwaves through the corridors of Whitehall and the boardrooms of carmakers alike. Mandates without matched consumer incentives are a recipe for collapse. “The private consumer has nothing to incentivise them,” he said. “If you can charge at home, your total cost of ownership is probably beneficial. But there is no incentive.”
You can see where this is going. Sales stagnate. Fleets carry the EV burden. Retail lags. And still the Zero Emission Vehicle (ZEV) mandate ratchets up with each passing year. “This year alone, we need a 50% increase in battery electric vehicles and a 150% increase in electric vans.” Good luck with that when public confidence is shaking.
Taxing the Wrong Drivers
Then there’s the sting in the tail. EVs are now subject to the “expensive car supplement” – a tax originally designed in 2017 to target luxury ICE vehicles over £40,000. Except, as Hawes rightly pointed out, “That hasn’t moved since 2017. And the overwhelming majority of EVs are now caught by it due to inflation.” Instead of helping people switch to electric, it’s penalising them.
And what about public charging? “If you’re lucky enough to have a driveway, you pay 5% VAT. If you charge in public? 20%. That’s a boon for the Treasury,” Hawes scoffed, urging the government to match the home energy rate for EV drivers relying on public infrastructure.
Myth Busting & the Media Narrative
Hawes also took aim at the EV misinformation swirling in the media: “EVs are not any more likely to catch fire than ICE vehicles. They’re not about to make car parks collapse. And no — EVs do not make you lose your hair.”
It would be funny if it weren’t so damaging. Because behind the fake headlines and clickbait fear, real investment is at stake. “The industry is invested. Look at the number of models available. It’s in their interest to sell as many of them as possible – and fast – to get a return on that investment.”
A Call for a Reset?
So, where does this leave us? According to Hawes, “We should be looking at a more fundamental review of this transition.” And he’s right.
The market isn’t moving fast enough. Consumers aren’t convinced. The infrastructure isn’t there. And the government, while taking steps, still isn’t doing enough. Yet, if we get it right, “The prize is huge – economic growth, carbon savings, financial benefits to the economy.”
But we won’t get there by crossing our fingers and hoping mandates alone will work.
As Hawes put it: “This is why it has to be everyone acting in concert if you want to deliver some of those ambitions.”
Time for the government, industry, and yes – the public – to tune in, stop squabbling, and get serious.
What do you think? Is the UK auto industry being pushed too hard too fast? Or is it still not doing enough? Drop your thoughts in the comments below or hit me up on socials.
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