Stellantis threatens to halt UK production over EV targets

Vauxhall owner Stellantis has warned it could stop production in the UK unless the British government does more to stimulate demand for electric vehicles or change its current electrification policy.

In the company’s strongest threat yet against the UK’s EV quotas, Maria Grazia Davino, the carmaker’s top UK executive, warned of tough EV mandates amid slowing sales in battery-run cars. “If this market becomes hostile for us, then we will enter an evaluation of producing elsewhere,” she said. “Stellantis production in the UK could stop.”

Her comments follow that of Stellantis chief executive Carlos Tavares, who called Britain’s EV policy “terrible”, which threatened to bankrupt carmakers.

The carmaker, which owns the Vauxhall, Peugeot, Citroën and Jeep brands, said it was considering the future of the whole UK operations.

It directly employs 2,500 people in both Luton and its Ellesmere Port factory in Cheshire. In Luton, it manufactured 90,000 diesel vehicles in 2023 and produced just under 4,500 electric vans in Ellesmere Port in the three months to December last year. Luton will start making some larger battery vans from 2025.

Speaking at the Society of Motor Manufacturers and Traders’ annual summit in London on Tuesday, Davino said the UK’s quota regime, which requires manufacturers to meet EV sales targets and rise annually, had put the company’s UK financial return “under stress”.

Her warning is the latest among car executives pushing back on the government’s EV quotas, with EV targets of 22 per cent of overall car sales this year, rising every year until 2030 to 80 per cent.

Carmakers that miss the targets face heavy penalties, though the scheme features concessions that aim to minimise the chance of manufacturers paying fines.

EV sales are rising slower than had been expected, leading several carmakers to warn they risk missing the targets. Ford’s then European boss Martin Sander told the Financial Times last month that the carmaker would divert petrol models to other countries to avoid crippling fines amid weak EV demand.

Davino said the company needed to find the right balance within the government mandate, and that a decision on the future of its UK production would probably come in less than a year.

About 14 per cent of Stellantis’s car sales, including the Peugeot, Citroën, Fiat and Jeep brands, in the UK are electric, while almost 8 per cent of its vans are battery model.