UK car production slumps to 76-year May low as US tariffs disrupt exports
The United Kingdom’s car manufacturing sector has suffered a significant blow, recording its lowest May output since 1949, according to new data released by the Society of Motor Manufacturers and Traders (SMMT). The sharp decline—amounting to nearly one-third less than the same period last year—has been largely attributed to the impact of new tariffs imposed by the United States on British-made vehicles.
According to the SMMT, just 49,810 vehicles rolled off UK production lines in May, excluding the Covid-19 lockdown period of 2020. This figure represents a stark contrast to recent years and illustrates the severity of current trade challenges and industrial transition.
US tariffs trigger export collapse
The SMMT said the primary driver behind this historic slump was the introduction of new 25% US tariffs on British car imports, announced in March by the administration of US President Donald Trump. The immediate effect of the tariff saw some of the UK’s leading car brands—such as Jaguar Land Rover (JLR) and Aston Martin—suspending or significantly reducing shipments to one of their key export markets.
JLR, one of the country’s flagship manufacturers, halted all US-bound shipments in April. Aston Martin followed suit with a considerable reduction in its US exports. Consequently, the proportion of UK car exports destined for the United States dropped from around 20% in May 2024 to just over 10% in May 2025.
The SMMT described the situation as one of "depressed demand" resulting directly from the new tariffs, adding that “many manufacturers [were] forced to stop shipments overnight.”
Domestic challenges add to the strain
While trade disruptions have been the most visible factor in the production drop, domestic challenges have also played a role. Many carmakers are currently undergoing substantial changes to adapt their factories for electric vehicle (EV) production, contributing to temporary shutdowns and reduced output.
Jaguar is in the process of transforming into an all-electric brand, a move that involves the complete retooling of its assembly lines. Similarly, Nissan is preparing for the rollout of its new Leaf model, requiring updates to its UK production facilities.
Mike Hawes, Chief Executive of the SMMT, acknowledged the turbulent period, stating: “2025 has been an incredibly challenging year for UK car makers, but we see some optimism for the future.”
A glimmer of hope: Trade deal eases tariff pressure
In a promising development, the UK and US governments struck a new agreement in May that will reduce import taxes on up to 100,000 British cars per year, slashing the tariff from 25% to 10%. This deal is set to come into force by the end of June and mirrors the volume of vehicles the UK exported to the US in 2024.
While the relief only applies to the first 100,000 units, vehicles exported beyond this threshold will still face a steeper 27.5% tax. The SMMT hopes this trade breakthrough will offer short-term relief and bolster long-term stability.
The agreement has been viewed as a sign of improving trade ties and may represent a shift in the more protectionist policies adopted earlier in the year.
UK industrial strategy offers structural support
The UK government’s broader industrial strategy is also expected to assist manufacturers in weathering the current storm. Recently announced plans include a £2.5 billion fund dedicated to automotive capital investments and research and development. Additionally, initiatives to reduce industrial energy costs aim to make UK manufacturing more competitive internationally.
The SMMT believes these efforts, combined with international trade agreements involving the EU, India, and the US, can pave the way for recovery.
What lies ahead?
Despite current hardships, industry leaders remain cautiously optimistic. The transition to electric vehicles is seen as essential to future growth, though it requires immediate sacrifices in production volume. Likewise, improving international trade relations, if sustained, could gradually restore the UK’s position in the global automotive market.
As British manufacturers continue to navigate complex global and domestic pressures, many hope the worst is over. With a clear policy direction, more accessible foreign markets, and long-term investment in clean mobility, the road ahead may yet be one of recovery and reinvention.