A TOP car brand that sells millions of motors worldwide is set to decide the fate of its two UK factories, with thousands of jobs at risk.
The firm blames tough new EV rules for squeezing its production, potentially leading to significant closures.
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Stellantis ranks as the third-largest automotive manufacturer in the world behind only VW and Toyota, and the second-largest in Europe, owning 14 brands including Vauxhall, Citroen and Peugeot.
However, CEO Carlos Tavares has said that the motors giant is struggling with the UK Government’s Zero Emission Vehicle (ZEV) Mandate.
While the ban on new petrol and diesel sales was delayed until 2035 by then-PM Rishi Sunak, the Mandate rules remained in place.
These dictate that ZEVs must make up a certain percentage of all carmaker’s sales each year, starting at 22% this year and rising to 80% by 2030.
If they fail to do so, they can be fined up to £1,500 for each car they produce over the limit.
And with the new Government suggesting the ban could be brought forward to 2030 again, the race against time could become even more urgent.
Mike Hawes, from the Society of Motor Manufacturers and Traders (SMMT) said: “[It is] extremely expensive to sell EVs in the UK because you have no incentives.
“Consumers respond to carrots not sticks and we are seeing that at the moment.
“If it was a really strict…. a lot of manufacturers would struggle to comply in that timescale and that wouldn’t be good for the consumer.”
Companies like Ford have already said they will reduce production of traditional cars to avoid the fines, while the industry body has demanded more help for firms.
Now, though, Mr Tavares has upped the pressure on the Mandate by suggesting it could lead to the closure of Stellantis’ factories in Ellesmere Port and Luton.
The latter has been in operation for over a hundred years and, between them, the sites employ around 2,500 both directly and in the supply chain.
During a company earnings call, Mr Tavares said: “The ZEV Mandate is hurting significantly our business model and this is triggering a strategic review of our business model, including the manufacturing footprint.”
He added that the company was in an “an intensive and productive dialogue” with the Government over the rules.
His comments come after Stellantis UK boss Maria Grazia Davino said that “production in the UK could stop” in the current “hostile” climate and asked: “Why should we keep investing?”
Meanwhile, the first pictures of the new “facelifted” Tesla were leaked online months ahead of its release.
A Government spokesperson said: “We know this will be a concerning time for Stellantis employees and their families, and we will work with trade unions, local partners and the company to support them through this process.Â
“The UK automotive industry remains one of our great success stories, employing over 150,000 people.
“The UK’s ambitious approach to the zero-emission vehicle transition resulted in over £20bn of private sector investment commitments in the UK automotive sector in 2023 and this sector will play a key role in supporting this government’s growth mission.
“We have a longstanding partnership with Stellantis and will continue to engage on their manufacturing future in the UK.Â
“We are working extensively and constructively with Stellantis around its concerns.
“We have always recognised the early years of the transition may be challenging for some manufacturers, which is why there are multiple ways in which manufacturers can comply.”
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