Hefty losses at two major car makers have underlined the scale of the challenge facing the industry as it struggles to go green.

In a bleak update to investors, Aston Martin announced 170 job cuts and scaled back electric car plans after losses widened to £289million last year from £240million in 2023.

Vauxhall, Peugeot and Fiat owner Stellantis also plunged into the red in the second half of 2024 with losses of £105million.

The figures underline the pressure on carmakers amid subdued demand for electric vehicles (EV) as motorists worry about high prices and charging infrastructure.

It came as the Society of Motor Manufacturers and Traders (SMMT) revealed just 78,012 vehicles rolled off British production lines last month - down 17.7 per cent on January last year.

SMMT chief executive Mike Hawkes said: 'UK vehicle producers face a perfect storm of global trade uncertainty, challenging manufacturing conditions and a market transition which is proving tougher than expected.'

Aston Martin said it will delay the launch of its first fully electric car until the end of the decade. Its release was already postponed last year until 2026 due to subdued consumer demand. The company said it was pursuing a 'phased approach' to electrification.

The company, known for making the cars driven by James Bond, has said it will further cut costs and boost future investments by slashing 170 jobs. It predicts the 5pc reduction to its global workforce will save it about £25million.

Aarin Chiekrie, an analyst at Hargreaves Lansdown, said: 'While Aston Martin is more famously known for burning rubber on the tarmac, it's been much better at burning through cash in 2024. 

'In an attempt to stem the financial bleeding, it is set to sack 5pc of its workforce. But that's only part of the puzzle, as costs can only be cut so far.'

He said the firm needs to boost revenues having seen them slip 3 per cent to £1.6billion last year.

Aston Martin shares have now lost more than 90 per cent of their value since listing on the stock market in 2018.

Stellantis' £105million loss in the second half of last year contrasts starkly with its £6.4billion profit a year earlier. 

The company's sales dipped across all of its key markets and revenue sank 21 per cent to £50billion.

The slump comes at a tumultuous time for Stellantis after the abrupt exit of chief executive Carlos Tavares in December.

Under an interim leadership team headed by chairman John Elkann, the company said it will reincite revenue growth and a profit margin of mid-single digits in 2025 through the release of 10 new models and a more flexible product portfolio.