We’re facing some potential upheaval in the UK auto industry, and it could have far-reaching implications for electric vehicle (EV) sales and production. In a surprising turn of events, Stellantis NV has announced it may cease production of vehicles in the UK unless the government reconsiders its ambitious EV sales targets.
Maria Grazia Davino, the regional managing director for Stellantis, voiced her concerns to reporters on Tuesday. She described the zero-emissions vehicle sales targets as unsustainable, amidst a backdrop of a rapidly approaching general election set for July 4.
Understanding the EV Sales Targets
The UK government has introduced stringent rules for automakers, requiring that 22% of each manufacturer’s new car sales be zero-emission this year. By 2030, this figure is expected to rise to a whopping 80%. For vans, 70% of new sales have to be electric by the same year.
With EV demand slowing down, Stellantis finds itself in a precarious position. To meet these targets and avoid hefty fines—potentially as much as £15,000 ($19,022) per vehicle—Davino said Stellantis would be forced to offer discounts.
The Labour Party has committed to keeping the mandate in place should it win the general election next week.
Stellantis’ Investments and Future Plans
Stellantis currently produces small electric vans across its Vauxhall, Citroën, Peugeot, Opel and Fiat brands at its site in Ellesmere Port. This follows a £100 million investment to turn the factory into an electric-only plant last year.
“We have undertaken big investments both in Ellesmere Port and in Luton and more to come,” Davino said at the SMMT International Automotive Summit in London. “But if this market becomes hostile for us we will enter an evaluation of producing elsewhere.”
This isn’t the first time Stellantis has threatened to leave the UK. Last year, the company warned it would shut factories unless potential tariffs on its electric vans exported to the European Union were renegotiated.
Current Challenges and Future Outlook
Stellantis has voiced concerns about the UK’s EV sales goals, especially as consumer demand has slowed in recent months. Persistent high prices and patchy charging infrastructure are cited as key reasons for the slowdown.
“If demand does not follow the offer, then we will be forced to take decisions — because we manage profit and loss, we manage operational decisions — that are impacting the UK,” Davino said.
When asked how long Stellantis, the UK’s best-selling van manufacturer, could continue without changes to the mandate, she said: “Less than a year.”
Stellantis sold almost 216,000 new cars in the UK last year, accounting for about 11% of the total market, including more than 100,000 under the Vauxhall brand.
As we keep an eye on unfolding events, it’s clear that the future of electric vehicle production in the UK is hanging in the balance. The outcome of the upcoming general election could have a significant impact on this industry and beyond.
