Stellantis NV warned of possible factory closures in the UK if the country doesn’t renegotiate its post-Brexit trade agreement with the European Union, adding to growing concerns Britain will miss out on the electric-vehicle boom.
(Bloomberg) — Stellantis NV warned of possible factory closures in the UK if the country doesn’t renegotiate its post-Brexit trade agreement with the European Union, adding to growing concerns Britain will miss out on the electric-vehicle boom.
The Vauxhall and Peugeot maker, which is retooling its Ellesmere Port site to make electric vans, said it’s unable to meet local content requirements because of rising raw-material prices and a lack of UK battery supplies. Japan’s Nissan Motor Co. said assembling cars in Britain is at risk of becoming too expensive.
“If the cost of EV manufacturing in the UK becomes uncompetitive and unsustainable, operations will close,” Stellantis said in a written submission to Parliament’s business committee. “The UK must consider its trading arrangements with Europe.”
The UK has been struggling to attract significant auto-industry investment in the aftermath of Brexit. Efforts to establish a domestic battery supply chain have largely foundered with local hopeful Britishvolt Ltd. entering administration. Carmakers prefer to have cell factories close to their vehicle assembly plants to keep costs in check.
Read More: UK to Unveil Battery Plant Strategy in Bid to Retain Carmakers
Bentley Motors Ltd. Chief Executive Officer Adrian Hallmark last week said it’s “concerning” that companies including Volkswagen AG have picked the likes of Canada and Spain over the UK for battery plants.
Shipping in batteries from Asia, the dominant producer, may lead to additional penalties. Forty-five percent of an electric vehicle’s value must be sourced in the UK or Europe from 2024 to avoid export tariffs of 10% — a burden for UK automakers selling cars abroad.
Stellantis said those requirements should be pushed back by three years. Renault SA in its submission suggested the UK introduce more attractive incentives for EV purchasing, including interest-free funding. Nissan cited headwinds including supply-chain bottlenecks and rising energy costs.
“The UK must, therefore, continually prove that it is a strong destination for both vehicle and battery manufacturing,” Nissan said in its written submission. “Government can support this with a competitive business environment, a clear industrial strategy, continued investment in R&D and facilitating access to critical raw materials.”
Stellantis employs roughly 5,000 people in the UK, including at Ellesmere Port and Luton, where the company produces mid-sized Vauxhall, Citroen, Peugeot, Opel and Fiat vans. Nissan said last week it’s in talks with the UK government about making additional investments in its Sunderland plant.
(Updates with Nissan comments from second paragraph.)
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