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Vauxhall owner to decide future of UK factories as net zero row escalates

October 15, 2024

Stellantis, the parent company of Vauxhall, Fiat, Citroen, and Peugeot, is set to decide the fate of its UK factories within weeks amid ongoing disagreements with the Government over electric vehicle (EV) sales targets.

In June, Stellantis warned it may need to close its Ellesmere Port and Luton plants unless ministers reconsider rules that require a certain percentage of EV sales. These facilities, which produce electric cars, vans, and employ over 1,000 workers, remain at risk as the company presses 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 failing to meet these targets face fines of £15,000 per non-compliant vehicle or must trade carbon credits with competitors.

Stellantis CEO Carlos Tavares has warned that current regulations force manufacturers to sell more EVs than consumers are demanding, 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 plants’ future would be made soon.

The challenge for carmakers comes as EV sales grew by 25% to a record 56,362 in September, but primarily due to demand from fleet operators rather than private consumers. Despite heavy discounts, private EV sales increased by only 3.7% year-on-year, signalling a need for further incentives to make EVs more appealing to individual buyers.