Car manufacturer Stellantis could stop UK production due to low EV demand

Stellantis, the parent company of Vauxhall, Citroën, and Peugeot, has issued a warning that it might stop its UK production unless the government takes stronger actions to boost electric vehicle (EV) demand. Stellantis also owns a number of other notable car brands such as Fiat, Jeep, Alfa Romeo, Chrysler, Dodge, Maserati, and Opel.

The UK government initially planned to ban new petrol and diesel car sales by 2030 but postponed this by five years to allow consumers more time to switch to electric vehicles. The prime minister justified the delay, citing the high upfront costs of EVs.

However, Maria Grazia Davino, the company’s managing director, expressed concerns that the government’s current strategy for phasing out petrol and diesel cars could negatively impact Stellantis’s UK operations. She mentioned that a decision on whether to close the plants in Luton and Ellesmere Port near Liverpool could be made within a year from now. 

At an industry conference earlier this week, she said in a statement: “Stellantis UK does not stop, but Stellantis production in the UK could stop.”

Stellantis produces electric vans at its Ellesmere Port facility and plans to start manufacturing them at the Luton plant in 2025. Davino highlighted the investments made in these plants, with more planned. However, she warned that if the UK market becomes unfavourable, the company might consider relocating production.

Her remarks come amid ongoing tensions between car manufacturers and the government over the transition to electric vehicles, with recent demand for EVs slowing. Manufacturers are also worried about competition from inexpensive Chinese EVs, which could force them to increase discounts in a sluggish market, impacting profitability.

Both the Conservative and Labour parties have policies targeting emission reductions and improved air quality. Meanwhile, the EU has accused China of unfairly subsidising its EVs and has threatened to impose heavy tariffs on Chinese imports.