The EV Transition Is Leaving the UK Auto Industry Behind

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(Bloomberg) — Tony Vitti hasn’t worked at the Vauxhall Trucks factory in Luton, north of London, in years. However, the 74-year-old retiree speaks of parent company Stellantis NV’s plans to close the site as if he were losing his job.

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“It’s devastating,” the former quality control director said of the 1,100 workers now at risk. “At least half of them have mortgages, and there is no such type of work. It may end up being a ghost town.”

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Vauxhall has been closely associated with Luton for 120 years, creating jobs and boosting the local economy – at its peak, it employed around 37,000 people in the town. Locals are not the only ones feeling the pain as the UK car industry is plunged into crisis, with demand for petrol vehicles falling and manufacturers struggling to meet the government’s ambitious electric car adoption targets. UK car production fell by 15% in October, the eighth straight month of decline.

Ford Motor Company last week announced plans to cut about 800 jobs in the UK by the end of 2027. Nissan, along with Ford and Stellantis, has warned of the impact of the zero-emission car sales mandate, pointing to potential job cuts. Jaguar revealed a rebranding in anticipation of its all-electric future, which has been widely criticized.

The UK car industry, once world-famous for producing brands such as Mini and Jaguar, has been in decline for years, with Brexit and rising energy costs adding to the challenges it faces. The country wants to be a leader in electric vehicles, but has lagged behind other countries in setting up the necessary factories and battery factories.

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Andy Palmer, former chief executive of Aston Martin Global Lagonda Holdings Plc, said government intervention was needed to prevent the UK car industry from grinding to a halt.

“At the moment, there are a lot of reasons why you wouldn’t necessarily build cars in the UK, from expensive energy to maybe a lack of incentives,” said Palmer, who heads electric vehicle charging company Pod Point Group Holdings Plc.

With an eye on plugging what she says is a £22 billion ($28 billion) black hole in UK finances, Treasurer Rachel Reeves offered carmakers less in last month’s budget. Executives had hoped to cut the value-added tax to boost sales of electric cars, which are still more expensive than combustion engine alternatives.

This leaves the onus on manufacturers to try to encourage consumers to purchase EVs so they can comply with the UK mandated system. Under a sliding scale of targets, zero-emission cars are supposed to make up 22% of new cars sold this year, reaching 80% in 2030.

Electric vehicle sales have surged in recent months as manufacturers cut prices to try to reach those levels, and the UK is ahead of many European markets, but this year’s share of 18% is still below target. Many of these cars are from Chinese brands, which are racing to sell their affordable electric cars in Britain as they face additional tariffs in the United States and the European Union.

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After the latest round of painful news from the sector, automakers have stepped up pressure to ease the authorization regime. Stellantis has already warned that it may stop manufacturing vehicles in the UK. Business Secretary Jonathan Reynolds announced a review, sparking protests from some who say the system is working well.

“If you change the ZEV mandate, it undermines investment from chargers – people have made commitments based on that,” said Fiona Howarth, chief executive of Octopus Electric Vehicles, an electric vehicle leasing company.

The recent increase in demand shows that consumers will buy electric vehicles if they are affordable, according to Erin Becker, managing editor at Auto Trader Group Plc, an online car marketplace. “The discount proves that if the price is right, people want to make the switch,” she said.

Stellantis’ efforts to blame Luton’s planned closure on delegation have also drawn skepticism from electric vehicle advocates, given that the plant does not yet produce electric vehicles and exports most of the vehicles it makes. The company plans to move production to its Ellesmere Port site near Liverpool, which makes electric vans across its Vauxhall, Citroën, Peugeot, Opel and Fiat brands, following a £100m investment to turn it into an electric-only vehicle factory.

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“I think linking the potential job losses of the shifting industry to electric vehicles is unfair,” said Delphine Lin, CEO of EQT-owned fast-charging company InstaVolt Ltd.

Stellantis declined to comment.

It’s not just the UK where carmakers are struggling. In addition to the 800 job cuts in the UK, Ford wants to cut about 2,900 jobs in Germany and 300 jobs elsewhere in Europe. Stellantis faces delays in introducing new models, product recalls, and shrinking market share in the United States and Europe. Volkswagen AG is considering closing its factories for the first time ever in Germany, and suppliers there are cutting thousands of jobs.

Other factories in the UK have already closed. Honda Motor Co. closed its Swindon plant in 2021, ending decades of production in Europe.

Nissan Motor operates the UK’s largest factory in Sunderland, north-east England, and is capable of making up to 600,000 cars a year but has only produced 325,000 in 2023. The Japanese carmaker last year pledged to invest £2bn in Sunderland from In order to increase the production of electric cars, including another battery factory. This follows announcements by Tata Motors, owner of Jaguar Land Rover, of building a £4bn battery factory in Somerset, and BMW AG’s decision to manufacture small electric models at its site in Oxford.

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On Monday, Ford will begin manufacturing electric drive units at its factory in Halewood, near Liverpool.

Industry executives are now speculating about what form changes to the ZEV mandate could take. The type of vehicles that are counted within the percentages – some hybrids, for example – rather than the percentages themselves could be variable.

Stellantis is calling on the government to merge targets for passenger cars with those for commercial trucks, which currently allow for slower adoption of electric vehicles. It also wants exported battery-powered electric vehicles to be counted within the mandate, arguing that this would stimulate production in the UK.

Car makers face fines of up to £15,000 per vehicle if they fail to comply. Manufacturers can avoid penalties by using a credits trading program and catch up in later years. This exemption clause has allowed electric vehicle companies such as Tesla Inc. The Chinese company BYD is collecting large sums of money from competitors who need to meet emissions standards.

Back in Luton, workers still hope Stellantis executives will change their minds. On Thursday, at city hall, local MP Rachel Hopkins joined workers to plan their response in what she described as an emotional meeting.

“It’s heartbreaking for the city, which is why we have to struggle to try to keep the jobs that require good skills,” Hopkins said. “We have a long history of manufacturing and automobile manufacturing in our city, and it is devastating for that history to come to an end.”

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