Output of all cars dropped by more than 15% from a year earlier, mainly due to a fall in exports following weak demand, the Society of Motor Manufacturers and Traders (SMMT) said.

Production of electric and hybrid vehicles declined by a third compared with last year, due to flagging European demand and the retooling of factories for new models.

The figures come after Vauxhall maker Stellantis said this week it would close its Luton van-making factory, partly due to rules imposed to speed up the transition to electric vehicles in the UK.

In addition, Ford said last week it would cut 800 jobs in the UK over the next three years because of difficult trading conditions, including intense competition and less demand for electric vehicles (EVs).

Mike Hawes, the SMMT’s chief executive, said: “These are deeply concerning times for the automotive industry, with massive investments in plants and new zero emission products under intense pressure.”

Globally, demand for EVs has slowed, he said, while in the UK, manufacturers have to contend with “the toughest targets and most accelerated timeline” without the incentives necessary for customers to drive demand.

Although production of EVs fell in October, sales of electric cars in the UK have been increasing.

In October, they made up one out of every five cars registered, although industry sources insist this is largely down to unsustainable discounting.

There has been a growing row between the government and the industry over the sale of new petrol and diesel cars being phased out over the next few years.

Under the UK’s zero emissions vehicle (ZEV) mandate, manufacturers are currently required to sell a certain percentage of cars and vans that do not emit any emissions ahead of a 2030 ban on the sale of new petrol and diesel cars.

In 2024, EVs must make up 22% of a carmaker’s car sales, and 10% of van sales. This target is set to rise.

For every sale that pushes it outside the mandate, firms must pay a £15,000 fine – but they can also buy “credits” from firms that can meet this mandate.

Business Secretary Jonathan Reynolds has said there will be a “fast track” consultation of how the EV targets are enforced.

However, he also reiterated Labour’s commitment to the 2030 phase-out of new petrol and diesel vehicle sales.

A spokesperson for the Department for Business and Trade said the government knew the industry “needs certainty and stability” and was investing £2bn in car manufacturing and more than £300m to support the uptake of electric vehicles.

“We continue to work closely with the sector to make the transition a success,” the spokesperson added.

The closure of Stellantis’ factory at Luton will put 1,100 jobs at risk.The former UK manufacturing lead for Stellantis, Mark Noble, expressed his “disappointment, shock, and anger” about the closure plans.

He said the site was closing “for a number of reasons that are external to the plant”, including uncertainty over Brexit tariffs and the ZEV mandate.

He said troubles for Stellantis’ UK plants at Luton and Ellesmere Port “started with Brexit” because it “caused a lot of uncertainty”.

“When you’ve got two UK plants that export 80%+ of their build, with the tariff confusion and no clarity that really hurt the two plants.”

He added that for the ZEV mandate the government “has to decide: is this a tax, a £6bn tax on the car companies, or is it their mandate to go green?”

“They need to make it possible for the car manufacturers to meet these targets,” he said.

He added that there were still barriers to mass adoption of EVs, including a lack of charging infrastructure.

“If everybody bought an electric vehicle tomorrow, I don’t see how we charge them,” he said.However, Vicky Read, chief executive of EV charging industry body Charge UK said a charger “is being installed every 25 minutes”.

Charging rollout is reliant on private sector funding, so talk of electric car targets being weakened is “incredibly concerning”, she said.

According to government figures, there are more than 71,000 public charge points in the UK, with 57 added on average each day.

Government adviser James Richardson, the director of analysis for the Climate Change Committee said that traditional car companies were at risk of being overtaken by new competitors.

“Companies don’t always see how quickly these markets can change, and then they can get left behind,” he said.

He said electric sales targets were “really helping to send that signal to companies that they need to move fast, or competitors will come in and take the market from them”.

The comments add to a growing row between the government and the industry over the sale of new petrol and diesel cars being phased out over the next few years.

On Tuesday, Stellantis, the owner of Vauxhall, said it would close a plant in Luton, putting 1,100 jobs at risk, partly due to the EV targets.

Business Secretary Jonathan Reynolds told the House of Commons on Wednesday that Stellantis’s decision was “a dark day for Luton”.

It joins Ford in axing UK jobs. Last week, it announced it will cut 800 jobs in the UK over the next three years, partly due to the EV target but also because of increased competition.Ms Brankin said: “The one thing that we really need is government-backed incentives to urgently boost the uptake of electric vehicles.”

She said Ford has invested “significantly” in the production and development of EVs, with “well over” £350m put into electrification in the UK.

“So we kind of need to make it work,” she said.

Both firms have previously raised doubts about their future in the UK because of other factors, separate to EV targets.

Ford closed its Bridgend factory in 2020, axing 1,644 jobs, citing Covid-19 as one of the reasons while Vauxhall’s former owner suggested in 2019 that Brexit threatened its Luton factory.

Meanwhile, some analysts have said a shift towards luxury vehicles and away from cheaper models are also part of the reason for Ford’s problems.

Reynolds blamed the previous government for Stellantis’ Luton closure, saying Labour had “inherited a position of extreme frustration”.

He said there would be a “fast track” consultation of how the EV targets are enforced, but reiterated Labour’s commitment to a 2030 phase-out of new petrol and diesel vehicle sales.

However, shadow business secretary Andrew Griffith said the 2030 target was a “jobs killer” and that Stellantis’ decision was “the direct result of a government policy that is simply unworkable for industry”.

The previous Conservative government moved the deadline for the phase-out from 2030 to 2035, but it kept penalties for non-compliance.

Under the current mandate, a percentage of the cars that companies sell must qualify as zero-emission.

EVs must make up 22% of a company’s car sales and 10% of its van sales this year.For every car sale outside of that, firms must pay a £15,000 fine.

That target is set to rise to 28% for cars and 16% for vans in 2025. The rules will then get tougher every year ahead of a complete ban of new petrol and diesel car sales.

Labour has said it intends to reinstate the 2030 target as part of its wider commitments to climate change policy, but it will consult on how the “direction of travel” for the policy will work.

There are flexibilities in the current system, allowing manufacturers that can’t meet the targets to buy “credits” from those that can.

In practice, this means firms could buy credits from companies such as Tesla or Chinese firm BYD, which build electric models exclusively.

Manufacturers argue that demand for electric cars has not been as high as was expected when the rules were drawn up.

As a result, to avoid fines, they say they are having to discount new vehicles heavily, or subsidise rivals that only build electric cars, none of whom have a manufacturing base in the UK.

Sales of electric cars have, however, been increasing. In October, they made up one out of every five cars registered. However, industry sources insist this is largely down to unsustainable discounting.

Reynolds told an industry audience at a dinner hosted by Society of Motor Manufacturers & Traders (SMMT) on Tuesday he is “profoundly concerned” about the way zero-emissions policies currently operate.

“I don’t believe the policies that we have inherited, and I mean specifically in relation to zero emission vehicles, are operating today in a way anyone intended them to,” he said.

He and Transport Secretary Louise Haigh met car firms last week to discuss the EV rules.A number of options have been suggested, such as allowing sales credits to be transferred between cars and vans and giving “credits” for British-made EVs sold abroad.

The SMMT has called for urgent government intervention to safeguard the sector, warning that weak demand for electric cars and the requirement to fulfil sales quotas had “the potential for devastating impacts on business viability and jobs”.

Nissan, which builds EVs at its plant in Sunderland, has said at the time the rules are “undermining the business case for manufacturing cars in the UK, and the viability of thousands of jobs and billions of pounds in investment”.