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Britain's car sector is at a critical crossroads, as Europe accelerates its transition to battery-electric vehicles with strategic investments and policies. Without coordinated efforts, the UK risks falling behind in the global EV race, facing economic and manufacturing decline.Britain’s automotive industry really finds itself at a pretty crucial crossroads these days. If it doesn’t sharpen its industrial strategy and manage to stake a firm claim in the EV supply chain, there’s a real risk of long-term decline. A recent report from the Jacques Delors Centre, titled Europe’s Car Industry in Transition: Stuck in Neutral or Shifting into Gear?, underscores just how urgent this moment is—Europe is rapidly shifting toward battery-electric vehicles (BEVs), and delaying action could be a recipe for disaster. The study warns that trying to drag your feet on electrification just ends up making things worse—you're essentially disrupting your own path forward rather than keeping anything steady. For the UK, these challenges hit especially hard. Car production has fallen to levels not seen since 1954, thanks to Brexit-related supply chain chaos, tougher EV mandates, and inconsistent policy signals. One key point the report stresses is that consumer demand for EVs isn’t the problem. In fact, interest across Europe is quite strong. The main barrier remains the cost—on average, battery EVs in the Eurozone are about 22% pricier than similar petrol models. This gap largely comes down to manufacturers focusing on premium segments instead of pushing for more affordable, mass-market options. Fortunately, some EU countries are taking steps to close this gap with targeted policies to develop their own EV ecosystems domestically. Poland, for example, made a smart move by investing heavily in battery manufacturing. That strategy sparked a regional cluster that’s positioning Poland as a significant player in Europe’s BEV supply chain. Meanwhile, France’s “Battery Valley” initiative and Spain’s EV recovery programs are attracting plenty of investment aimed at boosting advanced manufacturing and cutting dependency on outside sources. Sadly, the UK seems to be falling behind these exciting developments. The report warns that, although national efforts are necessary, they are not enough on their own—without a cohesive, larger ecosystem that can compete globally, especially with China, the current dominant leader in battery production. China’s stronghold and ability to offer low-cost EVs at scale pose a serious threat. Industry experts point out that for the UK to stay relevant, it needs consistent policies, affordable vehicles, and better cross-sector collaboration. Frequent policy swings and unpredictable incentives just shake investor and manufacturer confidence—these ups and downs aren’t helping create the stable environment needed for sustainable domestic production and innovation. Looking at recent data from the Society of Motor Manufacturers and Traders (SMMT), the UK’s automotive sector faces mounting difficulties. In April 2025, vehicle output dropped by 15.8% compared to the previous year, marking the worst figures since 1952, outside of pandemic-related disruptions. Both car and commercial vehicle production saw sharp declines, and exports—normally a bright spot—continued to fall due to ongoing uncertainties in trade policies. The report attributes this downturn to several issues, including new model changeovers, industry restructuring, and tariffs—especially those from the US. Moving into May, the situation didn’t improve much, with a further 32.8% decline in vehicle production versus last year. It’s pretty clear that stabilizing investment and boosting competitiveness—perhaps by lowering energy costs and clarifying policies—are now urgent priorities. But it’s not just about more cars coming off the line; the bigger European picture shows some promising moves to support EV supply chain resilience. The European Commission, for instance, is updating waste codes linked to batteries. The goal? Encourage circular economy principles, improve recycling, and secure critical raw materials needed to manufacture batteries. Stepping up battery recyclability and reducing import reliance fits neatly into Europe’s Green Deal ambitions, too. Poland’s rise as a lithium-ion battery hub offers a great example of how strategic national investments can pay off. Poland now ranks second worldwide after China when it comes to battery production—its sector has grown by an incredible 38 times since 2017, becoming a big share of what it exports. Major players like LG Energy Solution, Northvolt, Umicore, and Mercedes-Benz have set up significant operations there, illustrating how aligning policy and investment in battery tech can give a country a real edge and help decrease dependence on Chinese imports. And France isn’t sitting still either. They recently announced joint ventures involving the nuclear group Orano and China’s XTC New Energy Materials, aimed at producing EV battery components locally. It’s a clever way to diversify supply chains, ramp up European manufacturing, cut costs, and keep jobs in the region—all while safeguarding against potential disruptions from outside sources. These partnerships show a pragmatic approach, blending global collaboration with efforts to strengthen domestic industry. All in all, the UK’s automotive scene is at a pivotal moment. Without a clear, long-term strategy—one that provides stable incentives, makes vehicles more affordable, and encourages industry collaboration—it risks falling even further behind as Europe pushes ahead with its EV transition. The Jacques Delors Centre wraps it up with a tough but fair message: “standing still is not an option.” As the EU accelerates its electrification push with coordinated policies and new regulations, Britain needs to act fast if it wants to keep its place in the evolving automotive landscape—or risk being left on the roadside of progress altogether. 📌 Reference Map: - Paragraph 1 – [1], [2] - Paragraph 2 – [1], [2], [6] - Paragraph 3 – [1], [3], [4] - Paragraph 4 – [5] - Paragraph 5 – [6] - Paragraph 6 – [7] - Paragraph 7 – [1], [2], [3], [4] Source: Noah Wire Services

Light rare-earth magnet shipments are clearing earlier, enabling a ramp-up in Chetak production ahead of the festival season, though heavy magnets remain scarce and supply remains volatile.Bajaj Auto: rare-earth magnet supply improves ahead of India’s festival season Rajiv Bajaj told CNBC-TV18, as reported by Reuters, that Bajaj Auto’s supply of light rare earth magnets has improved, with shipments beginning to clear about three to four weeks earlier. That improvement has allowed the company to ramp up production of its Chetak electric scooter after a period of disruption. Bajaj estimated August production of the Chetak at roughly 15,000 units, rising to about 40,000 units in September as magnet shipments speed up and production capacity returns to more typical levels for the festival period. The company had previously warned that August could be a “zero” production month before shipments began clearing. The supply issues follow export restrictions imposed by China— which produces around 90% of the world’s rare earths—earlier in the year, prompting automakers to seek alternative sources. Reports note that while shipments of light rare earth magnets have started to clear, heavy rare earth magnets remain more difficult to secure. Several outlets corroborated that deliveries to dealerships resumed in late August, enabling a controlled restart of production and distribution to meet festival-season demand, when vehicle purchases typically rise. Observers say the situation remains dependent on continued magnet availability and that the sector is monitoring whether the current easing in supplies proves durable. Source: Noah Wire Services

Industry leaders and PAAPAM caution that proposed reductions in import duties could threaten over 1,200 local auto parts companies and 1.8 million jobs, amid concerns over market flooding and policy inconsistencies.Pakistan’s local auto parts manufacturing industry is currently grappling with quite a bit of uncertainty, especially in light of proposed changes to the National Tariff Policy for FY 2025-31. These adjustments aim to cut import duties down to a maximum of 15 percent, as part of a broader move towards trade liberalization. The Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPAM) has been pretty vocal about their opposition, warning that such a significant reduction in tariffs could seriously threaten the survival of the domestic auto component industry. They’re warning that over 1,200 companies might face closure, and around 1.8 million jobs could be at risk. Shehryar Qadir, who’s the Senior Vice Chairman of PAAPAM, pointed out how starkly different Pakistan’s approach is compared to other countries that support their automotive sectors with protective tariffs. For example, India imposes import duties on cars at a hefty 125 percent, Thailand’s are at 80 percent, Indonesia’s at 60 percent, and Vietnam’s at 52 percent. All these countries aim to shield and nurture their local auto industries. By contrast, Pakistan’s plan to flatten tariffs to a range of just 0-15 percent, with a maximum of 15, actually risks flooding the market with cheaper imports, which could be a huge blow to local manufacturers. And honestly, the repercussions go far beyond just the manufacturers. The auto sector supports a wide network of related industries, supplying key materials like steel, plastic, rubber, copper, aluminum, and various other parts to big vehicle assembly plants run by Toyota, Honda, Suzuki, Hyundai, Kia, and Changan. There’s already been a noticeable decline—vehicle sales have fallen by over 50 percent, dropping below 150,000 units last year. This decline reflects deeper systemic challenges across the supply chain, which not only impacts employment but also stalls skill development that’s vital for long-term industrial growth. Usman Aslam Malik, who’s the chair of PAAPAM, along with other industry leaders, have consistently warned about rushing into these tariff cuts without careful planning. They emphasize that sudden, steep reductions—without mechanisms like cascading duties—could undermine the industry’s ability to add value and remain resilient in the long run. Malik has stressed the importance of phased implementation and engaging all stakeholders to protect investments, jobs, and the country’s competitive edge in the global market. PAAPAM argues that such cautious measures are necessary if Pakistan hopes to avoid destabilizing its manufacturing base and to safeguard the industry that forms the backbone of regional economies. Adding to the complexity, recent fiscal decisions seem to be sending mixed signals. Despite commitments under the Automotive Industry Development and Export Policy (AIDEP) 2021-26 to bolster local manufacturing, the government hiked the sales tax on small cars from 12.5 percent to 18 percent. Simultaneously, they cut import taxes on large SUVs—leading to vehicle price drops that can be over Rs 20 million per car. This kind of tax disparity distorts the market, making imported cars more attractive to consumers, even as locally made vehicles and parts struggle to compete. These recent moves have raised real concerns about whether Pakistan’s auto parts industry can remain sustainable down the line. The industry’s contribution to employment, import substitution, and export potential remains significant. However, rising energy costs, heavy taxation, and a lack of policy consistency are creating additional hurdles. Industry representatives stress the importance of creating a business environment conducive to investment and growth. The draft National Tariff Policy for 2025-30 also aims to simplify tariffs by reducing the number of slabs to just four—0%, 5%, 10%, and 15%—and gradually phasing out additional customs and regulatory duties. Officially, these reforms are meant to boost industrial growth by making products more affordable and competitive, and by encouraging exports. But many stakeholders in the auto parts sector insist that these reforms need to be carried out transparently, with clear timelines and regular consultation with the industry, to find a good balance. They caution that too rapid a shift towards liberalization without enough safeguards could turn Pakistan’s auto industry into a heavily import-dependent market, with dire consequences for jobs, capability, and economic resilience overall. In a nutshell, if these tariff policies are rolled out without proper adjustments and meaningful dialogue with industry players, there’s a real danger that Pakistan’s automotive scene might shift away from protecting domestic production toward relying heavily on imports. Such a move would have serious implications—not just for employment but also for long-term industrial strength and economic stability. That’s why PAAPAM’s call for a thorough fact-finding mission and structured engagement is so important. They’re emphasizing the need for policies that actually support Pakistan’s automotive industry rather than undermine it. Note: References correspond to the footnotes provided and are included here for context. Source: Noah Wire Services