The UK car manufacturing industry is at a competitive disadvantage to the rest of Europe due to sharply rising energy costs, the sector warned on Tuesday.
Analysis by the Society of Motor Manufacturers and Traders (SMMT) found that the sector’s annual energy bill – which is already £50 million ($61.3m) more than its European Union rivals – will rise by £90m in 2022, a 50 per cent increase. It said the uplift in bills was equivalent to more than 2,500 automotive jobs.
It comes as the British car industry suffered its second weakest May in three decades as sales dropped by more than a fifth year-on-year. Inflation in the UK hit an annual rate of 9.1 per cent in May, a new 40-year high, after broad increases in the cost of fuel and electricity.
UK electricity prices are the most expensive of any European car manufacturing country and 59 per cent above the EU average, the SMMT said.
That means British companies could have saved nearly £50m if they were buying energy in the EU.
The additional cost of producing vehicles and components in the UK is putting manufacturers at a competitive disadvantage, the SMMT said.
It called for urgent action as the UK’s £21.2bn auto supply chain tries to meet accelerated timelines for zero emission transformation.
Speaking at the organisation’s annual summit in central London, SMMT chief executive Mike Hawes said challenges such as the coronavirus pandemic, a shortage of parts and trade uncertainty were “immense”, but addressing the UK’s high energy costs was “the industry’s number one" task.
"Help with energy costs now will help keep us competitive and be a windfall for the sector, stimulating investment in innovation, R&D [research and development], training — all reinvested in the UK economy.
“With the right backing this sector can drive the transition to net zero, supporting jobs and growth across the UK and exports across the globe.”
The SMMT set out its vision for the industry to move to net zero — 'From full throttle to full charge' — as it phases out the sale of new petrol and diesel cars and vans by 2030.
It said the 123,500 jobs supported in every region of the country are at stake in the transition.
Setting out its road map, it said: "For many long-established component segments, such as engine and exhaust producers and their sub-suppliers, the transition to electrification presents major challenges. While some companies are already on the journey, many risk being left behind as the jobs and skills involved with internal combustion engine [ICE] technology may not be transferable. At least 22,000 jobs, £11 billion of turnover and £2bn GVA in the UK is currently reliant on ICE-based technologies.
"There are, however, significant opportunities for those able and enabled to transition, for example, in batteries, motors and power electronics. SMMT’s roadmap sets out the wide range of measures, covering industrial and market transformation, which must be implemented if the opportunities are to be grasped."
Mr Hawes said inflation, energy shortages, rising fuel prices and the cost-of-living crisis give the impression the UK faces “the return of the 1970s”.
He acknowledged the automotive industry is being “hit hard just like it was hit then”, but he insisted there is a “big difference”.
He said: “Go back to the ’70s, typified by poor management, poor labour relations, hence poor quality. That’s not the situation now.
“We have a global reputation for engineering excellence, innovation, admired and desirable brands from across the country.
“We have a strong foundation. We’re still a powerhouse of international trade, with great wealth, contributing billions to the economy and supporting thousands of livelihoods in every corner of the country.”
But circumstances in recent years “have not been easy”, with Brexit a “trauma” that is “not yet done”, he added.
Five demands of the car industry
· Support businesses facing high energy costs as they transition to net zero, including the provision of short-term support; making UK automotive equivalent to Energy Intensive Industry status; maintaining automotive Climate Change Agreements; and delivering low cost, zero carbon electricity and a national supply of hydrogen.
· Deliver a globally competitive business environment for the sector, by expanding the scale and scope of the Automotive Transformation Fund to boost supply chain transformation and adaptation.
· Create a globally competitive investment environment, extending the super deduction or introducing a generous successor, and enhancing R&D tax credits.
· Ensure full implementation of the EU-UK Trade and Co-operation Agreement and prioritise UK automotive in trade policy and future free trade agreements.
· Focus on current and future skills needs via reform to the Apprenticeship Levy and a dedicated long term automotive skills strategy.
The Bio
Name: Lynn Davison
Profession: History teacher at Al Yasmina Academy, Abu Dhabi
Children: She has one son, Casey, 28
Hometown: Pontefract, West Yorkshire in the UK
Favourite book: The Alchemist by Paulo Coelho
Favourite Author: CJ Sansom
Favourite holiday destination: Bali
Favourite food: A Sunday roast
Volvo ES90 Specs
Engine: Electric single motor (96kW), twin motor (106kW) and twin motor performance (106kW)
Power: 333hp, 449hp, 680hp
Torque: 480Nm, 670Nm, 870Nm
On sale: Later in 2025 or early 2026, depending on region
Price: Exact regional pricing TBA
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The specs
Engine: 4.0-litre V8 twin-turbocharged and three electric motors
Power: Combined output 920hp
Torque: 730Nm at 4,000-7,000rpm
Transmission: 8-speed dual-clutch automatic
Fuel consumption: 11.2L/100km
On sale: Now, deliveries expected later in 2025
Price: expected to start at Dh1,432,000
The specs: 2019 Audi A7 Sportback
Price, base: Dh315,000
Engine: 3.0-litre V6
Transmission: Seven-speed automatic
Power: 335hp @ 5,000rpm
Torque: 500Nm @ 1,370rpm
Fuel economy 5.9L / 100km
The specs: Lamborghini Aventador SVJ
Price, base: Dh1,731,672
Engine: 6.5-litre V12
Gearbox: Seven-speed automatic
Power: 770hp @ 8,500rpm
Torque: 720Nm @ 6,750rpm
Fuel economy: 19.6L / 100km
THE SPECS
Engine: 6.75-litre twin-turbocharged V12 petrol engine
Power: 420kW
Torque: 780Nm
Transmission: 8-speed automatic
Price: From Dh1,350,000
On sale: Available for preorder now
The specs
Engine: 2-litre or 3-litre 4Motion all-wheel-drive Power: 250Nm (2-litre); 340 (3-litre) Torque: 450Nm Transmission: 8-speed automatic Starting price: From Dh212,000 On sale: Now
Specs
Engine: Electric motor generating 54.2kWh (Cooper SE and Aceman SE), 64.6kW (Countryman All4 SE)
Power: 218hp (Cooper and Aceman), 313hp (Countryman)
Torque: 330Nm (Cooper and Aceman), 494Nm (Countryman)
On sale: Now
Price: From Dh158,000 (Cooper), Dh168,000 (Aceman), Dh190,000 (Countryman)
The biog
Born November 11, 1948
Education: BA, English Language and Literature, Cairo University
Family: Four brothers, seven sisters, two daughters, 42 and 39, two sons, 43 and 35, and 15 grandchildren
Hobbies: Reading and traveling
War 2
Director: Ayan Mukerji
Stars: Hrithik Roshan, NTR, Kiara Advani, Ashutosh Rana
Rating: 2/5
Our legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
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Why are asylum seekers being housed in hotels?
The number of asylum applications in the UK has reached a new record high, driven by those illegally entering the country in small boats crossing the English Channel.
A total of 111,084 people applied for asylum in the UK in the year to June 2025, the highest number for any 12-month period since current records began in 2001.
Asylum seekers and their families can be housed in temporary accommodation while their claim is assessed.
The Home Office provides the accommodation, meaning asylum seekers cannot choose where they live.
When there is not enough housing, the Home Office can move people to hotels or large sites like former military bases.
'Shakuntala Devi'
Starring: Vidya Balan, Sanya Malhotra
Director: Anu Menon
Rating: Three out of five stars
Red flags
- Promises of high, fixed or 'guaranteed' returns.
- Unregulated structured products or complex investments often used to bypass traditional safeguards.
- Lack of clear information, vague language, no access to audited financials.
- Overseas companies targeting investors in other jurisdictions - this can make legal recovery difficult.
- Hard-selling tactics - creating urgency, offering 'exclusive' deals.
Courtesy: Carol Glynn, founder of Conscious Finance Coaching
Ferrari 12Cilindri specs
Engine: naturally aspirated 6.5-liter V12
Power: 819hp
Torque: 678Nm at 7,250rpm
Price: From Dh1,700,000
Available: Now
The specs
AT4 Ultimate, as tested
Engine: 6.2-litre V8
Power: 420hp
Torque: 623Nm
Transmission: 10-speed automatic
Price: From Dh330,800 (Elevation: Dh236,400; AT4: Dh286,800; Denali: Dh345,800)
On sale: Now
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THE LIGHT
Director: Tom Tykwer
Starring: Tala Al Deen, Nicolette Krebitz, Lars Eidinger
Rating: 3/5
The specs
Engine: Long-range single or dual motor with 200kW or 400kW battery
Transmission: Single-speed automatic
Max touring range: 620km / 590km
Price: From Dh250,000 (estimated)
Sheikh Zayed's poem
When it is unveiled at Abu Dhabi Art, the Standing Tall exhibition will appear as an interplay of poetry and art. The 100 scarves are 100 fragments surrounding five, figurative, female sculptures, and both sculptures and scarves are hand-embroidered by a group of refugee women artisans, who used the Palestinian cross-stitch embroidery art of tatreez. Fragments of Sheikh Zayed’s poem Your Love is Ruling My Heart, written in Arabic as a love poem to his nation, are embroidered onto both the sculptures and the scarves. Here is the English translation.
Your love is ruling over my heart
Your love is ruling over my heart, even a mountain can’t bear all of it
Woe for my heart of such a love, if it befell it and made it its home
You came on me like a gleaming sun, you are the cure for my soul of its sickness
Be lenient on me, oh tender one, and have mercy on who because of you is in ruins
You are like the Ajeed Al-reem [leader of the gazelle herd] for my country, the source of all of its knowledge
You waddle even when you stand still, with feet white like the blooming of the dates of the palm
Oh, who wishes to deprive me of sleep, the night has ended and I still have not seen you
You are the cure for my sickness and my support, you dried my throat up let me go and damp it
Help me, oh children of mine, for in his love my life will pass me by.