Vauxhall-owner may halt UK production over EV plans

Person charging a blue electric car
[Getty Images]

The owner of Vauxhall, Citroën and Peugeot has warned it may halt UK production unless the government does more to boost demand for electric vehicles (EV).

Maria Grazia Davino, the boss of Stellantis, said the current government approach to the banning of petrol and diesel cars risked hurting its UK business.

She said a decision about whether to close Stellantis's plants in Luton and at Ellesmere Port near Liverpool could come in "less than a year".

"Stellantis UK does not stop, but Stellantis production in the UK could stop," she told reporters at an industry conference on Tuesday.

Stellantis owns several other well-known car brands, including Fiat, Jeep, Alfa Romeo, Chrysler, Dodge, Maserati and Opel.

The UK government initially set a goal of 2030 to ban sales of new petrol and diesel cars, but delayed the plan by five years to give consumers more time to make the transition to electric vehicles.

Explaining the decision, the prime minister said the "upfront cost" of EVs was still too high.

Stellantis makes electric vans at its Ellesmere Port plant and has previously said it will start making electric vans at its Luton plant in 2025.

Speaking to reporters, Ms Davino said: “We have undertaken big investments in Ellesmere Port and in Luton, with more to come.

“But if this market becomes hostile to us, we will enter an evaluation for producing elsewhere”.

Her comments follow a long tussle between car manufacturers and the government over the push towards electric vehicles, the demand for which has slowed recently.

Competition from cheap Chinese electric vehicles has led manufacturers to worry further about giving up too much profit for a slow market.

“It means that you have to increase discounts to push the market that isn’t there. And this has a number of consequences for the business case”, Ms Davino said.

Both the Conservative and Labour parties have policies aimed at reducing emissions and increasing air quality.

Meanwhile, the EU has said Chinese EVs were unfairly subsidised by its government, and threatened to impose punitively high taxes on Chinese imports.