Stellantis has warned that it may relocate its electric vehicle (EV) production out of the United Kingdom, citing the country’s ambitious zero-emission vehicle sales targets as untenable.
The UK recently introduced a zero-emission vehicle mandate, requiring 22% of new car sales to be zero-emission vehicles by the end of 2024. By 2030, 80% of new passenger car sales and 70% of new van sales must be electric.
Stellantis’ managing director for the UK, Maria Grazia Davino, expressed concerns about the feasibility of these targets.
“We have undertaken big investments both in Ellesmere Port and in Luton and more to come. But if this market becomes hostile for us we will enter an evaluation of producing elsewhere,” said Davino.
The automaker’s worries are driven by a global slowdown in EV demand. Davino noted that Stellantis would need to offer significant discounts on its vehicles to avoid fines of up to $19,022 per vehicle for non-compliance with the mandate.
“If demand does not follow the offer, then we will be forced to take decisions because we manage profit and loss, we manage operational decisions that are impacting the UK,” she explained.
Stellantis is particularly concerned about the impact of the UK’s new car sales rules on its electrified van business. The company produces small electric vans under several brands, including Vauxhall, Citroën, Peugeot, Opel, and Fiat, in Ellesmere Port and Luton.
In 2023, Stellantis’ new car sales comprised 11% of the total UK market, with nearly 216,000 new cars sold. The Vauxhall brand accounted for over 100,000 of these sales.