UK car output jumps 27% in May from year earlier on steady EV demand

(Reuters) – Britain’s car production rose for a fourth straight month in May, driven by higher demand for electric vehicles, according to an industry body.

The Society of Motor Manufacturers and Traders (SMMT) said on Friday a total of 79,046 cars rolled out of factory gates in the UK last month, an increase of nearly 27% year-over-year. That is still 31.9% lower than the 2019 output levels.

While easing supply chain snarls have boosted vehicle production, Britain’s car industry continues to grapple with post-Brexit export rules.

Under the trade deal agreed when Britain left the European Union, the origin rule requires a rising proportion of electric vehicles’ parts to be made locally to qualify for trade without tariffs, starting 2024.

The rule has drawn criticism from several automakers as it will make these vehicles more expensive and potentially hurt demand.

Combined hybrid electric, plug-in hybrid and battery electric vehicle volumes surged 95.4% in May to 27,636 units, and represented 35% of all cars produced during the time, SMMT said.

Exports accounted for 79.5% of the total output, SMMT said, with the EU remaining the biggest market.

(Reporting by Eva Mathews in Bengaluru; Editing by Shilpi Majumdar)