July 25, 2024

Stellantis issues warning of potential halt in electric vehicle production in the UK

Multinational automotive manufacturer Stellantis has indicated it may halt electric vehicle (EV) production in the UK unless the UK Government enhances incentives to boost EV demand.

This decision is a response to the strict zero-emissions vehicle sales targets set by the country.

Maria Grazia Davino, Stellantis’ managing director for the region, stated that these sales targets are “unsustainable”.

During a press conference organised by the Society of Motor Manufacturers and Traders (SMMT) in London, Davino expressed Stellantis’ concerns.

Bloomberg quoted Davino saying, “We have undertaken significant investments in Ellesmere Port and Luton and more to come. But if this market becomes hostile for us, we will consider producing elsewhere.”

She added that a decision regarding the company’s UK production is expected to be made “in less than a year”.

Both major political parties, the Conservative and Labour, have affirmed their commitment to maintaining the current EV sales targets in the upcoming general election on 4 July 2024.

As per the UK mandates, 22% of each manufacturer’s new car sales this year must be zero-emission, increasing to 80% by 2030.

For vans, the requirement is 70% electric by the same year.

Facing a decrease in EV demand, Stellantis may need to offer discounts to meet these targets or face fines of up to £15,000 per non-compliant vehicle.

Stellantis has made substantial investments in its UK operations, including a £100m investment last year to convert its Ellesmere Port factory into an electric-only plant, producing small electric vans for its Vauxhall, Peugeot, Citroën, Opel, and Fiat brands.

Additionally, the company manufactures mid-size vans in Luton, near London.

The UK’s ambitious EV sales objectives are being challenged by a recent slowdown in consumer demand due to high prices and inadequate charging infrastructure, as highlighted by Bloomberg.

Davino cautioned that the escalating targets towards 2030 “could be very damaging”.

In the previous year, Stellantis sold nearly 216,000 new cars in the UK, capturing approximately 11% of the total market.

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