Stellantis’ UK boss warns for factory closures amid ‘electric challenge’

Auto giant Stellantis warns of a potential production withdrawal in the UK due to concerns over the government’s electrification policies. Maria Grazia Davino, the automaker’s UK Managing Director, pointed to the existential threat posed by the zero-emission vehicle mandate and the proposed bans on new combustion-engined car sales.

Speaking at the Society of Motor Manufacturers and Traders’ (SMMT) annual summit in London, Davino highlighted the necessity of government support for electric vehicle demand. She stressed that while Stellantis can adapt to various scenarios, the UK market could become unwelcoming without the proper support. “If the market becomes hostile to us, we will consider producing elsewhere,” she stated, although such a decision is not imminent, and the company remains open to discussions.

An example from the Italian playbook?

It’s not the first time Stellantis has made a fist, throwing its industrial workforce on the scales. When the Italian government invited Chinese carmakers to construct factories, Stellantis CEO Carlos Tavares similarly warned about shutting down Fiat plants and decentralizing production to seek lower costs.

The current Conservative government in the UK recently postponed the new gasoline and diesel car ban from 2030 to 2035. However, the Labour Party, leading in polls for the upcoming general election, plans to revert to the 2030 target.

This shift creates uncertainty within the industry, with sector representatives urging the government to establish a clear and consistent timeline. Stellantis is transforming the Luton plant to manufacture fully electrified vans as of 2025.

The automaker joins the plea for financial incentives to boost EV adoption, proposing a temporary reduction in VAT on new EV purchases.

According to the SMMT, such measures could add 300,000 more zero-emission cars to British roads and generate significant economic growth, potentially replacing over 17 million fossil fuel cars by 2035.

‘Major investments’

Stellantis has more investments in the UK, and a production sits in Ellesmere Port next to Luton. Despite these commitments, Davino reiterated the necessity for the above-mentioned favorable market environment to justify continued operations. “We have made major investments,” she insisted, pointing to the retooling and preparation of the Luton site.

The auto industry’s concerns extend beyond Stellantis. The sector is wary of abrupt regulation changes and the need for clear policies to ensure smooth transitions.

Previously, Stellantis had raised the possibility of closing UK factories if post-Brexit trade agreements with the EU led to high tariffs on EVs. Fortunately, an agreement between London and Brussels in December postponed the imposition of these tariffs by three years.

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