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BICS

How does BICS support the UK automotive sector?

The automotive industry qualifies for exemptions for policy electricity costs through BICS. Find out which products could qualify in your automotive production.

Millie Palmer

Automotive manufacturing is energy-hungry at every stage, from casting and forging to machining, paint and assembly. The British Industrial Competitiveness Scheme (BICS) reduces that burden by exempting eligible manufacturers from the indirect costs of the Renewables Obligation, Feed-in Tariffs and the Capacity Market.

For a sector that competes internationally on cost, the saving can be material, and it reaches well beyond the carmakers themselves.

Why is automotive covered?

BICS supports manufacturers in Great Britain by exempting them from some of their usual energy costs; this is in an effort to keep British manufacturing competitive internationally compared to global manufacturers without these policy costs.

The government identified eight sectors in the Modern Industrial Strategy that drive growth in the UK, and advanced manufacturing is one of them. Automotive sits within this group.

BICS supports both frontier industries (those that have the biggest impact on British growth, identified in the Modern Industrial Strategy) and the foundational industries that supply them, such as metal casting and forging, which is why so many automotive suppliers can apply.

Which SIC codes are relevant?

Working in the automotive manufacturing sector isn't enough on its own; you must have an eligible SIC code, manufacture a qualifying product and use at least 33,000 kWh of grid electricity a year.

Several eligible SIC codes apply directly to vehicle manufacturing and the supply chain. For example:

  • 29.10: Manufacture of motor vehicles
  • 29.20: Manufacture of bodies for motor vehicles, and of trailers and semi-trailers
  • 29.32: Manufacture of other parts and accessories for motor vehicles
  • 22.11: Manufacture of rubber tyres and tubes
  • 27.20: Manufacture of batteries and accumulators
  • 25.62: Machining
  • 24.51 to 24.54: Casting of iron, steel, light metals and other non-ferrous metals
  • 25.50: Forging, pressing, stamping and roll-forming of metal

A business doesn't need a code in the 29 group to qualify. A precision machining company serving vehicle makers can use 25.62, and a foundry can use the casting codes.

However, if your SIC code isn't on the list, even if you're serving the automotive industry, you don't qualify. Companies that can find a SIC code that covers their activity can add another SIC code to their record with a confirmation statement.

Which products are covered?

Eligibility also depends on the product, matched through its six-digit HS code.

The vehicle chapter of the tariff includes many eligible codes, and examples include brakes and servo-brakes and their parts (8708.30), gear boxes (8708.40), suspension systems (8708.80) and complete motor cars. Lithium-ion accumulators (8507.60) and new pneumatic tyres for cars (4011.10) are also listed.

There's over 1,600 product codes that qualify, so it's just a case of checking. Our guide to finding your HS code explains how to check where a particular component falls.

What does it look like in practice?

Company A is a tier 2 supplier that machines transmission housings for a gearbox manufacturer. Its electricity bill is driven by CNC machining centres, coolant systems and compressed air. It operates from one site, uses well above the minimum kWh annually, and its machining activity falls under SIC 25.62. Its products match an eligible HS code under 8708.40. It applies for a full exemption.

Company B makes seat frames for cars and also produces shelving for retail customers. Its shared paint line and curing ovens serve both product ranges. It originally filed under the SIC code for the retail shelving and, thus, did not have a qualifying SIC code. This means that Company B must file a confirmation statement to add the qualifying SIC code for car accessories (29.32) to their record.

Company B needs to work out how much of its energy is eligible, as the scheme only offers tiered relief, depending on how much energy is used on manufacturing qualifying products. It works out that 55% of its grid electricity supports the car parts. That puts it in the 100% tier, because the proportion is 50% or more.

The second example shows why apportionment matters. Many automotive suppliers make a mix of products, and the split between eligible and ineligible work sets the exemption. Our guide to estimating and apportioning your energy explains the method.

Where to pay attention

  • Paint shops and ovens. These use a great deal of electricity and are usually supporting activities, so decide how much of their use serves eligible production.
  • Mixed customers. If part of your output goes into products that aren't on the list, you'll need to apportion.
  • Shared sites. Many suppliers sit on multi-tenant estates, so check whether you share a meter.
  • Applications close on 30 November 2026. This should be the top of your priority list, you want your benefits next year.

When does the BICS benefit arrive?

If your application is approved, exemptions from the Renewables Obligation and Feed-in Tariffs begin in April 2027, and the Capacity Market exemption follows in October 2027.

Key takeaways

  • Automotive manufacturing qualifies as a frontier sector. Its suppliers in casting, forging and machining can also qualify as foundational.
  • Check your SIC and HS codes. Eligibility depends on both industry and product.
  • Mixed output means apportioning. Your exemption depends on the share of electricity supporting eligible products.
  • Apply before 30 November 2026. Evidence takes time to collect.

Automotive supply chains are complex, and the right code isn't always obvious. If you supply the sector and want to know where you stand, contact the Energy Relief Vault team to discuss your products.