The Society of Motor Manufacturers and Traders (SMMT) said that while almost every EV component is already built in UK plants, the capacity needs to be scaled up rapidly to secure the sector’s long-term future.

The SMMT wants the government to shore up Britain’s ability to compete as other countries increase backing for their own automotive sectors. This includes initiatives such as the US’ $370bn (£306bn) Inflation Reduction Act and the EU’s Green Deal Industrial Plan.

The SMMT has set out a blueprint, dubbed the ‘Green Automotive Transformation’ strategy, designed to position Britain as one of the world’s most competitive locations for advanced automotive manufacturing.

The UK plans to ban the sale of new petrol and diesel cars by 2030, but MPs have warned that the government faces a “huge challenge” to make this happen on time.

The strategy urges the government to lower the risk of investing in the EV sector with more competitive incentives, as well as action on energy costs and support for the next British ‘unicorns’ developing next-gen batteries and renewables.

It also calls for reforms of regulation that will accelerate the delivery of new production facilities and renewable energy generation. Maximising trade opportunities would help to secure access to essential raw materials which underpin EV production, the report states.

To date, more than £11bn has been invested by manufacturers in EV production locally, leading to fully electric or hybrid vehicles comprising almost a third of all UK-built cars last year, with an export value of £10bn.

By 2025, the sector is anticipated to produce more than 20 models of electric cars, vans, buses and trucks. The UK has seen a 25 per cent increase in the number of businesses supporting the supply chain in the last five years, the SMMT said.

British-built EVs and their components also benefit from greener production, with the UK ranking seventh in the world’s top 20 automotive manufacturing nations for low-carbon energy. British energy generation emissions are around 17 per cent lower than the EU average and lower than those in Germany, the US, Japan and China.

Mike Hawes, SMMT chief executive, said: “Britain boasts a firm foundation of EV production, backed by low carbon energy, outstanding R&D and a highly skilled and productive workforce.

“We must not squander these advantages. With other parts of the world turbocharging their support for the zero-emission vehicle transition, we need to step up to compete in this global race. Every part of the country has a stake in the switch and with fast, decisive action we can deliver for Britain the growth, jobs and green prosperity this country deserves.”