Stellantis, the parent company of Vauxhall, has announced plans to close its van manufacturing plant in Luton next April, putting more than 1,100 jobs at risk.
The decision comes amid increasing pressure from the UK government’s stringent electric vehicle (EV) sales targets, part of the Zero Emission Vehicle (ZEV) mandate.
Stellantis, which also owns Peugeot, Citroën and Fiat, intends to strengthen its UK operations by concentrating production at its Ellesmere Port facility in Cheshire. The plant has already received a £100 million investment to produce electric vehicles and is currently manufacturing smaller electric vans such as the Citroën e-Berlingo and Vauxhall Combo Electric. An additional £50 million investment is planned to boost production capacity at Ellesmere Port.
The closure marks the end of more than a century of manufacturing history in Luton, where Vauxhall first established operations in 1905. The Luton factory has been an important part of the local economy, producing commercial vehicles since 1932 and contributing to the town’s industrial heritage.
Stellantis’ decision follows warnings earlier this year that both of its UK plants were at risk due to government pressure to meet ambitious electric vehicle sales targets. The ZEV mandate requires automakers to ensure that 22% of their sales are zero-emission vehicles by the end of this year — a goal that many companies are struggling to meet. Companies face fines of £15,000 for each petrol or diesel car sold after the target and £18,000 for each non-compliant car.
Labour’s transport secretary, Louise Hay, has maintained a firm stance on the targets, despite industry calls for flexibility. Stellantis had previously considered retooling the Luton plant to exclusively produce electric vans, including an electric version of the Vauxhall Vivaro – the UK’s best-selling electric van. But it appears that this plan has been abandoned in light of the continuing challenges.
Staff at the Luton factory have been informed of the closure, with the company offering relocation packages for those wishing to move to Ellesmere Port and supporting those looking for new work. Trade union Unite described the proposal as “a complete slap in the face to our members in Luton”, vowing to support workers and urging the government to intervene.
Rachel Hopkins, Labor MP for Luton South, expressed deep concern at the announcement, highlighting the factory’s importance to the local economy and its role in Luton’s heritage.
Business Secretary Jonathan Reynolds acknowledged the difficulty of the situation, noting that the shift to electric cars should not come at the expense of jobs. A government spokesman stressed continued support for the automotive industry, noting that more than £300 million has been invested to promote zero-emission vehicles and £2 billion to help local manufacturing transitions.
The Society of Motor Manufacturers and Traders (SMMT) described the announcement as a “major concern” for the UK car industry and urged the government to review regulations and introduce measures to boost competitiveness.
Stellantis’ move reflects broader concerns within the automotive sector regarding the ZEV mandate and the push toward electrification. Manufacturers such as Ford and Nissan have also expressed concerns, with Ford recently announcing 800 job cuts in the UK, and Nissan warning of the potential for irreparable damage to the industry if mandates are not eased.
Automakers say the stringent targets, coupled with a lack of consumer incentives and infrastructure challenges, make it difficult to meet government expectations. SMMT highlighted that as of October, battery electric vehicles made up just 18.1% of new car sales in the UK, falling short of mandate requirements.
Competition from abroad, especially from Chinese manufacturers offering low-cost electric cars, is increasing pressure on British companies. Industry leaders are calling for greater flexibility and support to push through the transformation without jeopardizing jobs and the future of the UK automotive industry.