Stellantis, the parent company of Vauxhall, Fiat, Citroen and Peugeot, is set to decide the fate of its UK plants within weeks amid ongoing rows with the government over electric vehicle sales targets.
In June, Stellantis warned it may need to close its factories in Ellesmere Port and Luton unless ministers reconsider rules requiring a certain proportion of electric vehicle sales. These facilities, which produce electric cars and pickup trucks and employ more than 1,000 workers, remain at risk as the company pushes for changes to the zero-emission vehicle (ZEV) mandate.
The ZEV mandate, introduced this year, requires 22% of cars sold by manufacturers to be electric, a figure set to rise annually until 2030. Companies that fail to meet these targets face fines of £15,000 for each non-compliant car. Or they should trade carbon credits. With competitors.
Carlos Tavares, CEO of Stellantis, warned that current regulations are forcing manufacturers to sell more electric vehicles than consumers demand, leading to significant price cuts to stimulate sales. Tavares highlighted the need for government support to boost consumer demand during a recent Bloomberg interview, noting that a decision on the future of the factories will be made soon.
The challenge for automakers comes as electric vehicle sales grew 25% to a record 56,362 vehicles in September, but that was primarily due to demand from fleet operators rather than private consumers. Despite the deep discounts, private EV sales increased by just 3.7% year-on-year, indicating a need for more incentives to make EVs more attractive to individual buyers.