The UK automotive industry warned that new European Union proposals could harm trade ties between Britain and its largest export market. The Society of Motor Manufacturers and Traders (SMMT) said draft measures under the European Commission’s proposed Industrial Accelerator Act could put UK-built vehicles at a competitive disadvantage in Europe.

SMMT chief executive Mike Hawes said the proposed Made in Europe provisions could limit incentives to vehicles assembled within the EU. As a result, UK manufacturers could be excluded from support schemes covering a significant share of the new car market. Under the proposals, strict EU assembly requirements and EU27 eligibility criteria would apply to schemes supporting corporate fleet electrification and small electric vehicles.

Hawes warned the measures could disrupt a trading relationship worth nearly £70 billion annually and potentially breach the EU-UK Trade Cooperation Agreement. He urged the UK government and European counterparts to work together to find a solution. Separately, SMMT data showed UK new car registrations rose 7.2% year-on-year in February, while electric vehicles accounted for nearly a quarter of the market but remained below ZEV mandate targets.