Stellantis, the owner of Vauxhall, has warned the UK government that it may be forced to halt electric vehicle production in Britain unless the Brexit trade deal is renegotiated. The company, which also owns Citroën, Peugeot, Fiat, and other brands, says that strict 'rules of origin' under the Trade and Cooperation Agreement (TCA) make UK manufacturing uncompetitive.
The TCA requires that 40% of an electric vehicle's parts by value originate in the UK or EU to avoid tariffs. This threshold will rise to 45% next year and 55% by 2027, with battery packs also needing to be sourced locally. Carmakers failing to comply face a 10% tariff on exports across the Channel, putting them at a disadvantage against cheaper Asian rivals.
Stellantis, which employs over 5,000 people in the UK, including at plants in Ellesmere Port and Luton, argues that these rules are unworkable due to insufficient battery production capacity in the UK and Europe. It has called for a three-year delay to the rule changes until 2027, a position echoed by Ford and Jaguar Land Rover.
Ford, which has invested £380 million in its Halewood plant, described the rules as a 'pointless cost'. Jaguar Land Rover, the UK's largest automotive employer, said the timing of the new requirements is 'unrealistic'. Industry experts warn that failure to act could cost up to 800,000 jobs and threaten the survival of UK car manufacturing.
The government has been urged to strike a fresh agreement with the EU to maintain existing rules until battery production capacity catches up. Without such changes, Stellantis says it will have no choice but to close UK operations, leading to significant job losses and damage to the economy.
