The owner of the Vauxhall, Peugeot and Citroën brands has warned that its Ellesmere Port and Luton plants could close unless market demand for electric vehicles and “stupid” regulatory conditions change.
British chief executive Stellantis said the company did not want to close UK operations but would make a decision in “less than a year” in the face of unreasonable government sales quotas and a lack of consumer incentives in relation to vehicle VAT. and electricity.
“You have to create strategies based on efficiency. I want to maintain production [in the] UK and I want to be clear about this,” said Maria Grazia Davino.
She added that demand for electric vehicles is “soft” and unless there are further incentives for businesses to buy electric commercial vehicles or more support from the government, they may not have a choice.
“The demand is not coming. We expect the government, whoever it is, to respond to this. We are working together in the country for the health of the economy and the people,” she said.
“Whoever gets into government has to listen… There will be some implications for production in the UK. Stellantis UK does not end. Production of Stellantis in the UK could stop.
The warning comes weeks after CEO Stellantis blasted the government’s electric vehicle policy as “terrible”, warning it could eventually bankrupt car manufacturing.
Carlos Tavares blamed Britain’s quota system, which forces manufacturers to meet sales targets that he said were “double” market demand. The so-called zero-emission vehicle (ZEV) mandate forces manufacturers to sell an ever-increasing share of electric cars.
The ZEV mandate applies to all car sales, whether made in the UK or imported, so it is unclear why it would force manufacturers to close UK plants that export significant volumes. But Stellantis wants the electric vans it makes at those factories to count as cars for the purposes of the ZEV mandate. This would make it much easier to hit targets.
Before the election was called, a government minister said there was little or no prospect of any changes to the ZEV mandate this year.
It is the second time in a year that Stellantis has questioned the viability of its factories in Ellesmere Port, Cheshire, where Stellantis makes electric vans and cars after a £100m investment, and Luton, where it makes larger petrol and diesel vans, with electric versions coming next year .
Earlier this year, UK and European industry averted “cliff-edge” tariffs on electric car imports and exports across the Channel due to a clause in the Brexit trade deal that was suspended for three years after EU leaders were pressured by manufacturers in Germany , France, Great Britain and elsewhere.
The renewed threat of closure will put pressure on Labour, which is tipped to win next week’s general election, to give carmakers more freedom. Davino said they had no discussions yet with potential new chancellor Rachel Reeves or Prime Minister Keir Starmer.
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“We care about our employees. They are the reason we actually work so hard. I’m working to keep my employees here and that’s why I personally advocate so much,” Davino told reporters at a conference organized by the lobby group Society of Motor Manufacturers and Traders in London.
It said the government’s policy on electric vehicles was affecting its business model, forcing it to “invest more” than the market demands amid stagnant electric vehicle sales, making the justification for staying in the UK less viable than plants elsewhere around the world.
She said a range of measures could help boost demand, including reduced VAT on forecourt and energy price tags, a more robust network of charging points across the country and insurance incentives.
If a customer didn’t see an “advantage” in buying an electric vehicle, they would continue to buy conventional gasoline or diesel vehicles, she said.
Ashley Andrew, president of Hyundai Motor UK, said if the introduction of electric vehicles is to accelerate the gap in energy VAT, it needs to be addressed, as VAT was 5% for those with a driveway and charging station, but 20% for those who who are forced. use a public network.
Stellantis began electric-only production in Ellesmere Port in 2023, making it the company’s first plant in the world dedicated to such vehicles. As of this year, it also produces a range of electric passenger vehicles including the Vauxhall Combo Life Electric multi-purpose vehicle, the Peugeot e-Rifter and the Citroën ë-Berlingo.
The government and Unite have been asked to comment.