Posted: Wed 17th May 2023

Ellesmere Port: Brexit deal threatens UK’s electric vehicle future, warns Stellantis

News and Info from Deeside, Flintshire, North Wales
This article is old - Published: Wednesday, May 17th, 2023

Stellantis, one of the world’s largest car manufacturers, has issued a warning that it may not be able to uphold its commitment to producing electric vehicles (EVs) in the UK unless changes are made to the Brexit deal.

Stellantis, the parent company of Vauxhall, has voiced concerns that its UK-based factories, including the Ellesmere Port facility, may be at risk unless the UK government revisits and renegotiates a key aspect of the Brexit agreement with the European Union.

In 2021, Stellantis announced it was investing £100 million in its Ellesmere Port plant to convert it into a facility dedicated to electric vehicle production.

In a submission to the UK parliament’s business committee, Stellantis warned that trade between the UK and EU would be subject to 10% tariffs from next year, making exports uncompetitive in comparison to imports from Japanese and South Korean manufacturers.

When Stellantis decided to manufacture electric vans at Ellesmere Port in 2021, it assumed it would meet the forthcoming local content standards.

However, due to various external factors, including substantial increases in the prices of raw materials, the company now states that it is unable to meet these Rules of Origin.

In its submission, Stellantis said: “If the cost of EV manufacturing in the UK becomes uncompetitive and unsustainable, operations will close.”

“Manufacturers will not continue to invest and will relocate manufacturing operations outside of the UK, as seen with previously established UK manufacturers such as Ford and Mini.”

“The closing of UK manufacturing will see significant job losses, the loss of a skilled workforce and a negative impact on the UK economy.”

Stellantis also highlights that the UK currently does not have a sufficient supply of critical materials to support vehicle battery production.

Similarly, capacity in Europe is not yet sufficient to reach the Regional Value Content to comply with the Rules of Origin tightening in 2024, hence the current over-reliance on China.

The UK government responded, stating, “The business and trade secretary has raised this with the EU and is determined to ensure the UK remains one of the best locations in the world for automotive manufacturing, especially as we transition to electric vehicles.”

Labour leader Sir Keir Starmer said the UK must improve its existing Brexit deal.

In an interview with BBC Breakfast, Sir Keir emphasised the need for a more favourable deal, stating, “Look, we’re not going to re-enter the EU. We do need to improve that deal. Of course we want a closer trading relationship, we absolutely do. We want to ensure that Vauxhall and many others not just survive in this country but thrive.”

 

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