In October 2024 Morgan re-entered the US market after close to 20 years, and despite only having eight dealers the niche UK sports car manufacturer has already amassed a Stateside order book of around 200 vehicles.
For a firm that currently has a total production volume of around 650 to 700 cars a year, that represents a major new market, so one would think the imposition in the past few weeks by US President Donald Trump of 25% tariffs on all imports of automobiles, must have been met with major concern in the boardroom of Morgan.
Not so, the company’s Chief Marketing Officer Toby Blythe tells Business Motoring during a visit to Morgan’s factory in the Worcestershire town of Malvern – a production centre that consists of a sprawling assortment of buildings dating back to the earliest pre First World War days of this rather different manufacturer.
Morgan’s US expansion plans are still very much on, Blythe says; “We are back in the USA with the Plus 4, our biggest-selling model and the Super 3 which is not affected by the 25% tariffs as it is classed as a motorcycle (being a three-wheeler). It is subject to a 10% tariff.
“Our volume into the USA for Plus 4 last year was zero – we didn’t start delivering cars until literally a few weeks ago, so we are not overly reliant on it. We have other markets where that car will sell in if we don’t get the orders in America.”
So while Blythe admits that the tariffs are not welcome news, the USA appears in the Morgan business plan as additional volume, rather than core volume that the business depends on. “It might affect our growth aspirations – the risk is that there will be an effect on demand, we don’t know yet as we haven’t had enough time for it to play out but that is the worst-case scenario.”
He adds that so far demand for Morgans in America has been looking really strong; “We have over 200 orders either in production or scheduled for production – these are customers that have been waiting a long time for the chance to buy a Morgan and fortunately we haven’t yet had any cancellations. They are like us hoping for clarification, but we are where we are.”
In the worst-case scenario that the UK fails to agree a trade deal with the US and the 25% tariff is applied – a rate that will actually be 27.5% due to an existing 2.5% levy – Blythe says that the company will look at how the impact can be minimised for customers. “We’ll absorb some of it, the dealer will take a little bit and the customer will take a little bit – the final numbers are to be determined but I think we can get the knock-on effect to the customer down to in the region of 15 to 17%.”
While the true impact of tariffs cannot yet be determined, the US dealer network – which Morgan is looking to approximately double in number as soon as possible – is quite optimistic according to Blythe. “My fear is that it may induce hesitation to buy – people might wait to see how the situation plays out in terms of a trade deal. We hope of course that if they wait they will come to us in the end, but obviously a lot can change.”
Mandate relief
In contrast to the tariffs issue Morgan has received some rather better news in recent days, thanks to the much-awaited announcement by the UK Government on changes to the Zero Emissions Vehicle (ZEV) mandate.
As a low-volume manufacturer of under 2500 vehicles a year (in fact Morgan comes under the ‘micro-manufacturer’ tag the Society of Motor Manufacturers & Traders applies to those with annual volumes of under 1000 vehicles) the firm has been exempt from the provisions of the mandate and a requirement to meet a 22% ZEV sales figure in 2024, rising to 28% in 2025.
What Morgan and other low-volume manufacturers were worried about, however, was a lack of clarity from the Government as to whether they would need to have a full electric vehicle ready to go when the planned 2030 ban on sales of new petrol and diesel cars comes in – just five years away.
Now the Government has clarified the issue. While the change to the mandate allowing hybrid sales to continue until 2035 will not affect the company – packaging a hybrid drivetrain is not practical in a Morgan – small manufacturers have been exempted from the mandate provisions and the company can carry on selling what it produces now until 2035.
“It does have a big impact on us,” Blythe says. “We had been looking for clarification and were, alongside our colleagues in other low-volume manufacturers, speaking to Government very closely.
“There was a sense that they were definitely listening and understanding that 2030 was early for a lot of us, for a batch of reasons – everything from development time in the supply chain, maturity and readiness at our end of the marketplace, and of course customer demand.”
Morgan’s customer base is by no means typical of the automotive market – they are not merely buying mobility, but the unique appeal of a lightweight, fun-to-drive sports car which while today using an aluminium chassis tub, is still framed in ash and hand built from start to finish. A visitor walking around the Malvern factory will not find a single production robot but will see plenty of craftspeople at work forming metal and wood by highly traditional means.
“Our customers at the moment are not telling us they want electric, and we have had no impression that this view will change any time soon, in this decade, to allow us four years to turn round a viable electric vehicle,” Blythe says, another reason why the latest mandate changes are positive, while also putting the UK more in line with other regions. “Europe is 2035, California in the US is 2035, with some likely exemptions which are still to be defined.”
This is not to say that Morgan is completely ignoring the switch to electric – it cannot afford to, with the current future prospect that 2035 will produce a hard-stop for internal-combustion engined (ICE) new car sales in the UK and Europe.
“We are planning for an electric future, in two ways. Firstly we will look to sell ICE-engined vehicles in the markets that we can for as long as there is demand. In certain markets that could be beyond 2035 – we are a long way off at the moment and things could change.
“Then we are building the skills we will need within time (to go electric). We did a project in 2023 which was to make an electric prototype Super 3. It wasn’t a saleable product, merely an engineering exercise and its purpose a number of things – to develop contacts in the supply chain, to develop a skill set within the engineering team at Morgan, and also crucially for us to test how an electric vehicle looks and drives.”
With those Morgan key attributes of individually coachbuilt vehicles, lightweight and fun to drive in his mind, Blythe admits to having been nervous the first time he stepped into the electric prototype. “I was surprised how quickly I stopped missing the engine. It was really promising from that point of view, especially considering it was an early prototype, but we need the customer demand or (to go in that direction) would be an expensive folly.”
He believes a 2035 deadline will give the company enough time to develop in the electric direction while also being enough time to watch what happens in the marketplace, with other manufacturers. “There are not a lot of open-top two-seat electric sports cars in the market – you have MG, Porsche are coming, but you need a few more to establish a marketplace that we can join.”
Positive vibes
Despite volatile times in the automotive market, Blythe remains optimistic for Morgan’s prospects. “We are on course for a really good year – we have had a great start, our order bank is full with a lead time of around nine months. We’ve just launched the new Supersport and it’s been given a really good reception.”
So what does he want to see in the rest of 2025? “We would like a calmly negotiated trade deal with the USA, that is good for all involved – I hope that the approach taken so far, a bit of weathering the storm and reacting calmly has given us a chance of that.
“We want demand for our products to continue, but we are feeling pretty confident. The USA affects our growth aspirations more than it does our business model – it’s extra. We want to be there and our customers and dealers want us there – it’s just affected, not switched off.
“At our end of the market, we are small but nimble and adaptable – we can go and do something else if we need to.”
