One of the world’s biggest carmakers, Stellantis, has warned that factory closures in the UK could be possible unless the Brexit deal is renegotiated. The bombshell statement came amid manufacturers dealing with additional red tape when sourcing car parts under new rules introduced after Brexit.
Stellantis, who owns Vauxhall, Peugeot, Citroen and Fiat, warned that it would face tariffs when exporting electric vans to Europe from next year.
As part of the submission to a House of Commons committee, it called on the Government to extend the current rules to 2027 instead of 2024.
It added: “If the cost of EV manufacturing in the UK becomes uncompetitive and unsustainable, operations will close.
“Manufacturers will not continue to invest and (instead will) relocate manufacturing operations outside of UK, as seen with previously established UK manufacturers such as Ford and Mini.”
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Under the trade deal agreed when Britain left the European Union, 45 percent of the value of an EV must come from Britain or the EU from 2024 to avoid charges, Reuters reported.
Many experts have commented on the admission from the French manufacturer, saying that unless rules change, the British car-making industry could take an enormous hit.
Quentin Willson, founder of EV campaign group FairCharge, said: “We’ve been warning the Government for two years how vital UK battery manufacturing capacity was because of Brexit Rules of Origin.
“They weren’t listening and now our entire car industry is at risk and the economic threat is catastrophic. This is a terrifying wake-up call.”
Stellantis unveiled a £100million investment to boost the number of electric vehicles being produced at its Ellesmere Port site in 2021.
With the Brexit rule changes being introduced next year, experts are warning that it could lead to other companies avoiding the UK to build new factories and potentially even limit the number of vehicles being produced.
The UK missed out on Europe’s first Gigafactory which went to Germany, while French President Emmanuel Macron has been speaking with Elon Musk about further investment.
Ginny Buckley, founder and CEO of Electrifying.com, said: “The threat from Stellantis is clear; if the Brexit deal isn’t renegotiated – and soon – they will be forced to relocate outside of the UK, and I suspect others may follow.
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“This is bad news for our car industry that’s already faltering; with Nissan now the only mainstream company committed to manufacturing electric cars here in the UK, the threat to jobs across the sector is serious.
“Not only this, as a way of clawing back revenues, any extra production costs will be passed on to the consumer.
“This is not a price many motorists can pay in the current climate as affordability is still a huge issue for car buyers with just five electric cars currently on sale in the UK under £30,000.
“Our car industry is worth £14billion of added value to the UK economy and if it’s to stay competitive on the global stage as it electrifies, it’s vital that we’re seen as an attractive place for manufacturers to invest.”
Hugo Griffiths, consumer editor at carwow, highlighted how big of a player the UK is when it comes to manufacturing and importing cars to the EU.
It is estimated that the UK exports 80 percent of the 800,000 to 1.7 million cars built every year, but post-Brexit trade could be even more affected by the new rules.
He added: “There are issues around sourcing EV battery components, sure, and both the EU and UK are way behind other nations’ battery-production capabilities, and this needs addressing.
“But insisting that from next year only 40 percent, rather than 70 percent, of an EV’s battery components can come from outside the UK or EU before additional trade tariffs kick in is a purely synthetic, legislative problem.
“It has been concocted by policymakers, so it must be solved by them on behalf of the populations they represent.”
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