Multinational automotive manufacturer Stellantis has indicated it might cease electric vehicle (EV) production in the UK unless the UK Government enhances incentives to boost EV demand.
This move comes in response to the stringent zero-emissions vehicle sales targets set by the country.
Stellantis’ managing director for the region Maria Grazia Davino said that these sales targets are “unsustainable”.
Davino revealed this during a press conference organised by the Society of Motor Manufacturers and Traders (SMMT) in London.
Bloomberg quoted Davino as saying: “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.”
Davino added that a decision regarding the company’s UK production is expected “in less than a year”.
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By GlobalData
In the upcoming general election on 4 July 2024, both major political parties, the Conservative and Labour, are standing firm on maintaining the current EV sales targets.
The UK mandates that 22% of each manufacturer’s new car sales this year must be zero-emission, escalating to 80% by 2030.
For vans, the requirement is 70% electric by the same year.
With EV demand waning, Stellantis faces the challenge of potentially offering discounts to meet these targets or incurring fines of up to £15,000 per non-compliant vehicle.
Stellantis has invested significantly in its UK operations.
The most recent was a £100m investment last year to convert its Ellesmere Port factory into an electric-only plant, producing small electric vans for its Vauxhall, Peugeot, Citroën, Opel, and Fiat brands.
Additionally, the company manufactures mid-size vans in Luton, located near London.
The UK’s ambitious EV sales goals are being tested by recent slowdown in consumer demand, driven by high prices and inadequate charging infrastructure, Bloomberg noted.
Davino warned that escalating targets towards 2030 “could be very damaging”.
Last year, Stellantis sold nearly 216,000 new cars in the UK, capturing approximately 11% of the total market.
