Multinational automaker Stellantis is considering ceasing its vehicle production in the United Kingdom unless the government eases electric vehicle sales targets, Reuters reported.
Stellantis demands government action on EVs
Stellantis UK Group Managing Director MariaGrazia Davino warned Tuesday that the automotive giant could quit UK production if the government fails to take necessary measures to boost electric vehicle demand, which is crucial for automakers to comply with stricter regulations mandating them to sell more EVs.
Speaking at a news conference hosted by the Society of Motor Manufacturers and Traders (SMMT) in London, the Stellantis boss informed the media that the company plans to make a final decision on the future of its UK production in “less than a year.”
Stellantis’ remarks came just months after retooling one of its local factories to manage electric van production.
For context, the UK government offers tax incentives for corporate fleets to shift to electric vehicles. However, it currently has no subsidies for individual customers seeking to adopt EVs, which remain pricier than gas-powered models.
UK’s EV sales mandate
Automakers in the European Union can fulfill their CO2 emissions reduction targets by selling both hybrid and electric vehicles.
The situation is not the same in Britain, where automakers must sell a minimum percentage of all-electric vehicles starting this year. If they fail to meet the targets, they will face fines of about £15,000 ($19,033) per non-compliant vehicle they sell.
In 2024, the UK government imposed that 22% of all new car sales must be electric vehicles. It is part of Britain’s wider effort to ban petrol and diesel car sales by 2035. Per SMMT’s statistics, BEVs only accounted for 16.1% of sales through May this year.
“In the UK there will be consequences (of the mandates) for sure. Stellantis UK does not stop, but Stellantis production in the UK could stop.”
MariaGrazia Davino, Stellantis UK Group Managing Director
Stellanis plans to import fewer gas-powered cars into the UK to curb sales and achieve the 22% EV sales target instead of paying fines.
“The fact is that demand is not there.”
MariaGrazia Davino, Stellantis UK Group Managing Director
Thousands of UK auto jobs on the line
Stellantis plans to announce its final decision on the future of its UK production in “less than a year.”
The decision could affect thousands of automotive jobs in the country, considering the strong presence of Stellantis in the local market.
In 2023, Stellantis’ new car sales reached nearly 216,000 units in the UK. It accounted for approximately 11% of the total market, including over 100,000 units from the Vauxhall brand.
