Stellantis, the parent company of Peugeot, Citroën, Vauxhall and Fiat, has issued a warning that it may cease production of its vehicles in the UK due to electric vehicle (EV) production regulations. During an industry event on Tuesday, Stellantis managing director Maria Grazia Davino stated, “Stellantis production in the UK could stop.”
Currently, Stellantis manufactures electric vans in Ellesmere Port, Cheshire and had previously announced plans to expand production to Luton, Bedfordshire in 2025. However, according to Ms Grazia Davino, more needs to be done to increase consumer demand for EVs in order for Stellantis to meet UK regulations. These regulations stipulate that fully electric cars, rather than hybrids, must account for 22% of all automakers’ sales. At present, only 16% of Stellantis’ sales in the UK are EVs, according to data from the Society of Motor Manufacturers and Traders (SMMT).
Ms Grazia Davino emphasized the lack of consumer demand for EVs, stating, “The fact is that demand is not there.” However, under UK regulations, manufacturers face fines of £15,000 for every non-electric vehicle sold. This requirement is more stringent than European Union rules, which allow for hybrids to be included in CO2 emissions reduction targets.
Ms Grazia Davino announced that Stellantis will make a decision on whether to continue production in the UK within the next year. She added, “Let me be clear, I want to keep production in the UK.”
Like other car manufacturers, Stellantis is seeking financial incentives to encourage consumers to purchase EVs and invest in charging infrastructure, instead of traditional fossil fuel-powered vehicles. While there are tax breaks available for businesses purchasing EVs, there are currently no subsidies for consumers. Additionally, the upfront cost of an EV is higher than that of a traditional petrol or diesel vehicle. Stellantis also hopes to have the EVs it produces count towards the 22% target.
Ms Grazia Davino also stated that Stellantis may reduce sales in the UK by importing fewer fossil fuel models, as a means of meeting the target. This is the second criticism of government policy from Stellantis in recent months. In April, Stellantis chief executive Carlos Tavares stated, “The ZEV [zero emission vehicle] mandate promotes the self-destruction of the industry. I am not going to sell cars at a loss. If the UK is sincere about supporting manufacturing in the country, then changes must be made.”