Stellantis Threatens To Halt UK Production Without Boost In EV Demand

Stellantis, the multinational automaker behind brands such as Vauxhall, Citroën, and Peugeot, has issued a stark warning regarding its UK operations. Maria Grazia Davino, the head of Stellantis UK, indicated that without stronger government support to boost electric vehicle (EV) demand, the company might cease production in the country within the next year. This announcement raises concerns about the future of Stellantis's plants in Luton and Ellesmere Port near Liverpool.

Davino’s remarks came during an industry conference, where she emphasised the critical situation: "Stellantis UK does not stop, but Stellantis production in the UK could stop." She stressed that the government's handling of the transition from petrol and diesel vehicles to electric ones could significantly impact Stellantis’s business.

Stellantis, which also owns Fiat, Jeep, Alfa Romeo, Chrysler, Dodge, Maserati, and Opel, has invested heavily in its UK facilities. The company currently manufactures electric vans at Ellesmere Port and plans to start production at its Luton plant by 2025. Despite these investments, Davino warned that a hostile market environment could force Stellantis to reconsider its production plans in the UK.

The UK government originally set a target to ban the sale of new petrol and diesel cars by 2030 but has since postponed this deadline by five years, citing the high upfront costs of EVs as a significant barrier for consumers. Prime Minister Rishi Sunak argued that more time was needed for consumers to transition to electric vehicles.

Davino’s concerns also reflect broader industry challenges. The recent surge in competition from cheaper Chinese electric vehicles has put additional pressure on manufacturers, leading to worries about profitability in a sluggish market. "We have to increase discounts to push a market that isn’t there, and this has significant business implications," Davino noted.

Both major UK political parties, the Conservative and Labour parties, are committed to reducing emissions and improving air quality. Meanwhile, the EU has accused China of unfairly subsidizing its EVs and is considering imposing steep tariffs on Chinese imports to protect the European automotive market.