LONDON, United Kingdom, May 17 – European carmaker Stellantis is mulling the closure of UK factories should London fail to tweak its Brexit trade deal, it was revealed Wednesday.
The automotive giant has two British plants making Vauxhall vehicles — in Ellesmere Port on the northwest English coast and in Luton near London — and wants both to produce electric car batteries.
“If the cost of electric vehicle manufacturing in the UK becomes uncompetitive and unsustainable, operations will close,” the carmaker said in a recent submission to a UK parliamentary inquiry into the supply of the batteries — and picked up by British media Wednesday.
Stellantis warned it faced a post-Brexit risk of “major competitive disadvantage” over UK production owing to a tightening in trade rules.
Britain left the European Union at the start of 2021 despite vocal objections from its largely foreign-owned carmaking sector.
Stellantis — which makes also Citroen, Peugeot and Fiat cars — employs more than 5,000 people in the UK.
Post-Brexit rules-of-origin tariffs and rising logistics costs would stop it being competitive and potentially force plant closures unless London’s trade terms were adjusted, it warned.
Under the existing trade deal, at least 45 percent of the value of the vehicle parts must originate from Britain or the European Union to be exempt from custom duty, starting next year.
“The UK must consider its trading arrangements with Europe… to reinforce the sustainability of our manufacturing plants in the UK,” Stellantis said.
Reacting, leader of Britain’s main opposition Labour party, Keir Starmer, said “we need a better Brexit deal” to ensure firms such as Vauxhall can continue to operate in the UK.
Spokesman for Prime Minister Rishi Sunak said the government had raised the issue with Brussels and hopes to reach a resolution.
Mike Hawes, chief executive of UK automotive trade body, SMMT, said the situation posed “a significant challenge to manufacturers on both sides of the Channel”.
He pointed to “the prospect of tariffs and price increases which discourage consumers from buying the very vehicles needed to achieve climate change goals”.
