Stellantis boss Maria Grazia Davino warns UK production could end over EV rules

25 June 2024, 12:13 | Updated: 25 June 2024, 17:26

The maker of Peugeot, Citroën, Vauxhall and Fiat vehicles, Stellantis, has threatened to end its car making in the UK due to electric vehicle (EV) production rules.

"Stellantis production in the UK could stop," the company's managing director Maria Grazia Davino said at an industry event on Tuesday.

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The company makes electric vans in Ellesmere Port, Cheshire and had announced plans to also make electric vans in Luton, Bedfordshire from 2025.

But more needs to be done to spur consumer demand for EVs, Ms Grazia Davino said. If more electric cars aren't bought, manufacturers will be in breach of UK regulations.

UK law says fully electric cars, as opposed to hybrids, must make up 22% of all automakers' sales.

At present, just 16% of sales are EVs, according to the latest Society of Motor Manufacturers and Traders (SMMT) data.

"The fact is that demand is not there," Ms Grazia Davino said.

But producers face fines of £15,000 per non-electric vehicle sold.

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This is more onerous than European Union rules which allow hybrids as well as EVs to count in CO2 emissions reduction targets.

Stellantis will make a decision on whether or not to end UK production in "less than a year," Ms Grazia Davino said.

"Let me be clear, I want to keep the production in the UK," she added.

Stellantis, like other car manufacturers, is seeking financial incentives to encourage consumers to buy electric cars and invest in charging infrastructure, rather than buying ones run on fossil fuels.

While there is tax relief for businesses buying EVs, there are currently no subsidies for consumers.

The upfront cost for EVs is more than a traditional petrol or diesel-powered vehicle.

Stellantis also wants the cars it makes to count towards the 22% target.

Ms Grazia Davino said Stellantis may also opt to curtail sales by importing fewer fossil-fuel models into the UK as a way of meeting the target.

It's the second attack on government policy from the firm in recent months.

Stellantis chief executive Carlos Tavares said in April: "The ZEV [zero emission vehicle] mandate promotes the self-destruction of the industry. I am not going to sell cars at a loss. If the UK is sincere about having manufacturing activity in the UK and protecting it, then something must change."