Vauxhall owner Stellantis sees Brexit threat to UK factories

Vauxhall’s parent company has called for the government to renegotiate its Brexit deal with the EU to correct elements that place the future of UK plants at risk.

Stellantis, which also has Citroen, Fiat and Peugeot among its stable of brands, used a submission to a parliamentary committee’s inquiry on electric vehicle (EV) production to warn it was no longer able to meet Brexit trade rules on where parts are sourced.

The company said its commitment, two years ago, to the Luton and Ellesmere Port factories was based on meeting the strict terms of the deal that 45% of the value of EVs should originate in the EU or UK from 2024 to qualify for trade without tariffs.

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Stellantis called for that date to be extended to 2027 or “trade between the UK and EU would be subject to 10% tariffs”, it said.

Its submission to the BEIS committee continued: “If we source batteries from mainland Europe and China, as currently planned, our UK Stellantis plants will also be at a competitive disadvantage due to the higher logistics costs that we will face to transport the batteries from mainland Europe to the UK.

“This is a threat to our export business and the sustainability of our UK manufacturing operations.

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“To reinforce the sustainability of our manufacturing plants in the UK, the UK must consider its trading arrangements with Europe.

The company spoke up as the industry eyes a 2030 UK climate-led ban on the sale of new cars and vans powered by diesel and petrol.

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Efforts to bolster domestic battery production were badly damaged early this year when the start-up Britishvolt collapsed but was subsequently rescued.

The Reuters news agency subsequently reported remarks by Stellantis chief executive Carlos Tavares that the UK car industry would be “in trouble” without UK-made batteries.

“If the cost of EV manufacturing in the UK becomes uncompetitive and unsustainable operations will close,” the submission continued.

“Manufacturers will not continue to invest and relocate manufacturing operations outside of UK, as seen with previously established UK manufacturers such as Ford and Mini.”

A major obstacle to UK investment is a massive sweetener being offered to manufacturers by the US government,

Stellantis has no plans to make its own batteries in this country, unlike Nissan, however the Japanese-based firm has also voiced concerns about the viability of the UK due to competitive factors including high energy costs.

Stellantis halted, this week, a joint battery plant venture in Canada, accusing the Canadian government of reneging on a funding pledge.

Jaguar Land Rover has reportedly asked for a UK government subsidy to build a battery plant.

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