Rolls-Royce Guidance Hiked as UK Carmakers Stall on EV Mandate

Rolls-Royce has significantly raised its 2026 full-year profit guidance following a robust first half of the year. The company now expects underlying operating profit to reach between £4.7 billion and £4.9 billion, a notable increase from the previous forecast of £4.0 billion to £4.2 billion. This performance is fueled by a 46% surge in underlying operating profit, which reached £2.53 billion, and a 26% increase in revenue to £11.28 billion. Demand for power generation in data centers and strong growth in defense spending have been primary drivers for the company’s recent financial success.

In contrast, the UK automotive sector is navigating a period of uncertainty as manufacturers pause final investment decisions regarding local production. The Society of Motor Manufacturers and Traders (SMMT) confirms that companies are awaiting potential relaxation of the government's zero-emission vehicle (ZEV) mandate, which dictates a transition toward electric car sales through 2030. Production in UK factories fell by 7.5% in the first half of 2026, totaling 386,000 units, as industry leaders cite high investment costs and stiff global competition as major deterrents to current expansion plans.

Meanwhile, in India, the Ministry of Petroleum and Natural Gas (MoPNG) has strongly defended the E20 fuel policy, dismissing concerns regarding engine damage. The ministry emphasized that 20% ethanol-blended petrol underwent over 25 years of field testing and is now the national standard. Officials clarified that any reduction in mileage is largely attributed to driving patterns rather than the fuel composition itself. Despite reports of consumer feedback regarding sluggish performance, the government maintains that the transition is scientifically validated and will proceed to support long-term environmental targets.