Stellantis ‘could end’ UK production over EV rules

The UK head of Stellantis has warned that it could stop production in the UK in the face of pressure from the ZEV mandate and slow demand from private buyers.

Maria Grazia Davino said the parent company of Vauxhall, Fiat, Citroen and Peugeot would consider shutting its UK factories if government policies affected the profitability of its operations.

The group currently builds the Vauxhall Combo and related electric vans at its Ellesmere Port plant in Merseyside and plans to bring production of the all-electric Vivaro to Luton in 2025.

Speaking at the SMMT International Automotive Summit, Grazia Davino said restrictions set out by the ZEV mandate could have ‘consequences’ for Stellantis’s UK production, especially if the government does nothing to stimulate the private market.

“Stellantis UK does not stop, but Stellantis production in the UK could stop,” she said.

The mandate, which came into effect earlier this year requires 22% of a car maker’s sales to be purely electric in 2024 or face fines of £15,000 per vehicle. That proportion then rises every year between now and 2030, when a minimum share of 80% pure EV will be required. Grazia Davino said this rising target “could be very damaging.”

She told attendees: “If demand does not follow the offer then we will be forced to take decisions — because we manage profit and loss, we manage operational decisions — that are impacting the UK.

She insisted she wanted to keep production in the UK but said that Stellantis would make a decision on its UK future in “less than a year”.

She also suggested that the group might limit sales of petrol and hybrid vehicles as a means of ensuring it hit its EV targets. Ford recently suggested it could do the same if nothing was done to stimulate demand.

While sales of EVs have continued to grow in the UK, the growth has been driven massively by fleet and business demands, where low tax rates and salary sacrifice schemes make them more financially attractive.

Several manufacturers have warned that the next UK government will have to take action to encourage interest among private buyers in the face of generally higher purchase costs than an ICE vehicle.