In a significant move announced just ahead of the 2025 UK Budget, the Motability scheme will cease offering luxury vehicles from brands such as BMW, Mercedes, Audi, Lexus, and Alfa Romeo.
The scheme, which allows individuals receiving Personal Independence Payments (PIP) for serious mobility issues to lease a new vehicle by sacrificing a portion of their benefits, has faced previous criticism over the types of cars available.
A Shift to British Manufacturing
Motability Operations, the charity running the scheme, has declared a new strategic focus on supporting the UK automotive industry. The organisation has set an ambitious target for 50% of the vehicles it offers to be built in British factories by the year 2035.
This pivot away from premium German and Japanese marques is one of the latest pre-Budget announcements, setting the stage for Chancellor Rachel Reeves's second Budget statement.
Doubling Down on Domestic Production
In the immediate term, Motability Operations plans to work closely with manufacturers based in the UK to increase the share of British-built vehicles leased to customers. A key part of this strategy involves doubling the number of Nissan vehicles leased through the scheme to approximately 40,000.
The charity's stated intention is for 25% of cars on the scheme to be UK-built by 2030, a substantial increase from the current level of just 7%. With the scheme leasing around 300,000 vehicles annually, this 2030 target would see 75,000 British-built cars on the road. If the scheme's size remains consistent, the 2035 goal of 50% would equate to 150,000 British-built vehicles being leased each year, a dramatic rise from the 22,000 recorded last year.
Political Backdrop and Industry Reaction
The change to the Motability scheme arrives amidst a tense political climate. On the eve of the Budget, Chancellor Rachel Reeves addressed Labour MPs, urging unity and describing her Budget as a 'package' not a 'pick 'n' mix'.
She emphasised that the Budget would focus on three core priorities: cutting the cost of living, cutting NHS waiting lists, and cutting the cost of debt.
Meanwhile, the automotive industry has begun to react. A spokesperson for BMW confirmed the company was 'disappointed' with the decision but stated it would collaborate with Motability to ensure the prompt delivery of any existing orders. Mercedes-Benz has not yet issued a public comment on the announcement.
