The Automotive Quarterly Demand Report from the Advanced Propulsion Centre UK (APC) is released today 26 June 2026.
It reports that achieving the UK ambition of recovering output to 1.3 million vehicles by 2035 would require nearly doubling the production levels achieved in 2025.
The target remains below pre-Brexit and pandemic production levels, with current forecasts indicating that production may reach circa 1 million vehicles by 2035.
Dr Hadi Moztarzadeh, Head of Technology Trends, APC, said:
“The UK and European automotive transition remains firmly underway. Electrification continues to grow but at a more measured pace, with a broader mix of technologies (BEV and hybrid) shaping the market. To realise the UK’s production ambition, sustained investment in vehicle manufacturing, new platforms, and supply chain capability will be essential. The competitive opportunity extends far beyond gigafactories. As battery value shifts towards materials processing, refining, and recycling, the UK has an opportunity to strengthen its position in upstream and midstream battery supply chain.”
He continued:
“Achieving production ambition of 1.3 million vehicles a year by 2035 would see the UK automotive industry grow to nearly its existing maximum capacity, with current assembly facilities requiring new investment to remain competitive. The UK Government’s flagship DRIVE35 programme has expanded the scope to enable supply chain competitiveness.
The entry of one or more new OEMs could play a key role in helping the UK meet its production volume ambition. Increased vehicle production would drive demand for key components and materials, encouraging investment in local manufacturing, strengthening supply chains, and supporting high-value jobs across the industry.”
Globally, battery demand has been revised slightly upward in the near term but softened in the medium to long term. There are weaker expectations in heavy-duty and passenger car segments outweighing modest adjustments elsewhere, resulting in a marginally lower long-term total outlook.
Higher BEV and electric truck sales are boosting battery demand in the short term, but slower vehicle market growth and stronger demand for hybrids are reducing long-term battery demand.
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Read the Q1 2026 Demand Report.
