Brexit is ‘threat’ to UK car factories says parent firm of Vauxhall, Citroen, Peugeot and Fiat
One of the world’s largest carmakers has said it will be unable to keep their commitment to make electric vehicles in the UK without changes to the Brexit deal.
Stellantis – the parent company of Vauxhall, Citroen, Peugeot and Fiat – which employs more than 5,000 people in the UK – told a Commons inquiry into supply of batteries for EV manufacture that their UK investments were in the balance due to the terms of the trade deal.
The world’s fourth biggest car maker committed to making electric vehicles at its Ellesmere Port and Luton plants two years ago.
But in a submission to the inquiry, the company said the Brexit deal was a “threat to our export business and the sustainability of our UK manufacturing operations”.
It called on the Government to reach agreement with the EU to maintain existing rules until 2027, rather than next year’s planned changes which state 45 per cent of an electric car’s value should originate in the UK or EU to qualify for trade without tariffs.
Stellantis said the rise in the cost of raw materials during the pandemic and energy crisis meant it was “unable to meet these rules of origin”.
It said the upcoming rules would see 10 per cent tariffs on trade with the EU and make domestic production and exports uncompetitive with Japan and South Korea.
The company said that would mean manufacturers “will not continue to invest” and will relocate.
“To reinforce the sustainability of our manufacturing plants in the UK, the UK must consider its trading arrangements with Europe,” Stellantis told the inquiry, listing Honda’s closing of its site in Swindon and investment in the US as examples of its impact.
Stellantis said there will be “insufficient battery production” in the UK or Europe to meet government targets in phasing out petrol and diesel vehicles by 2025 and 2030.
“It we are unable to rely on sufficient UK or European batteries, we will be at a major competitive disadvantage. In particular against Asian imports,” they said.
“We need to reinforce the competitiveness of the UK by establishing battery production in the UK.”
Electric cars and batteries were among the final parts of the Brexit deal agreed between then Prime Minister Boris Johnson and President of the European Commission Ursula von der Leyen in 2020.
Press Association – Rob Freeman