The automotive market is no stranger to disruption, but several issues are creating a level of uncertainty that is particularly challenging for many businesses across the sector: motor finance commission claims, the impact of US tariffs, rising payroll costs, and the evolving zero-emission mandate. In this month’s One Auto API Market Insight , CEO Mark Fretwell looks at the issues currently shaping the market.

1. The Long Road to Clarity on Motor Finance Commissions

The ongoing legal battle around motor finance commissions remains a cloud hanging over the industry. Last month, the Supreme Court heard the appeal against the Court of Appeal’s judgment — a case with significant implications for lenders, dealers, and the broader motor finance ecosystem. However, despite the high-profile hearing, we are still some way from clarity.

The Supreme Court’s decision is not expected until summer. Only after that ruling will the Financial Conduct Authority (FCA) make their move, having committed to issuing an announcement within six weeks of the judgment. However, even then, the pathway forward won’t be straightforward. It is widely anticipated that the FCA will consult on a potential redress scheme following their announcement, meaning further weeks of uncertainty.

Until we have final clarity on the Court’s decision, the FCA’s response, and the shape of any redress process, businesses must continue to operate in a holding pattern. The true financial and operational impact on lenders, intermediaries, and the wider market remains unknown. 

2. Tariffs, Trade Deals, and the Cross-Atlantic Challenge

At the same time, international trade tensions are adding another layer of complexity. Last month, tariffs of 25% announced by the United States came into force, immediately affecting British automotive exports. Jaguar Land Rover (JLR) — a flagship of the UK’s automotive manufacturing — has suspended exports to the US market as a result, while the government scrambles to negotiate a resolution.

Talks are underway to try and secure a trade deal that could reduce tariffs on US car imports into the UK from 10% to 2.5%. However, negotiations of this kind are rarely simple or swift. In the meantime, UK car manufacturers are left facing increased costs, disrupted supply chains, and heightened market risk.

3. Payroll Pressures Driving Dealer Belt-Tightening

Dealers are also grappling with sharply rising payroll costs. Inflationary pressures, higher minimum wage thresholds, and increases in national insurance have been pushing up costs across the board. In response, many dealer groups are being forced into belt-tightening — cutting back on non-essential expenditure, reducing headcount, and reassessing investment priorities. For an industry that depends heavily on customer service excellence, these cuts risk compounding broader market challenges unless they are met with process innovation and the smart use of new technologies.

4. Zero-Emission Mandate: A Gentler but Still Steep Climb

The government has recently updated the zero-emission vehicle (ZEV) mandate.  While the ban on sales of internal combustion engine (ICE) vehicle sales by 2030 has now been restated, the government has now introduced greater flexibility on how manufacturers scale up their electric vehicle (EV) registrations — along with a potential reduction in the fines for missing targets.

This update is a relief for OEMs struggling to meet aggressive EV sales targets against a backdrop of insufficient retail demand. However, it does little to address the major structural barriers to EV adoption, particularly for households without access to off-street parking. For these drivers, the cost and inconvenience of charging remain real obstacles — a problem that not only dampens new EV sales, but also threatens to limit demand for used EVs, a key factor in achieving improved residual values and lower monthly payments.

Without meaningful investment in accessible and cost effective public charging infrastructure and incentives that make EV ownership viable for all households, the industry risks a two-speed market: tax incentivised new car schemes at one end, and a large segment of the population for whom EVs are not a viable option at the other.

The Path Forward

At One Auto API, we believe that access to accurate, real-time data has never been more crucial. In times of uncertainty, informed decision-making becomes the greatest competitive advantage.  As the industry navigates the challenges of regulatory change, cost pressures, and international trade upheaval, our role is to provide the data that businesses need to stay ahead — through APIs that are easier to access and implement,  bespoke reporting capabilities and implementation consultancy — helping you adapt quickly,  whilst reducing your costs.

The next six months will be critical. Businesses that can remain flexible, well-informed, and proactive will be best placed to weather these challenges — and emerge stronger on the other side.

Here to Help

If you need help driving new products and features, our expertise and unparalleled access to data will help you achieve speed-to-market, at lower cost – essential in a dynamic, challenging market.

Book a free 30-minute consultation to see how we can work together to keep your business ahead of the curve.