Vauxhall’s parent company Stellantis has announced plans to close its van factory in Luton in April next year, putting more than 1,100 jobs at risk.
The decision comes amid increasing pressure from the UK government’s strict sales targets for electric vehicles (EV), part of the zero-emission vehicle (ZEV) mandate.
Stellantis, which also owns Peugeot, Citroen and Fiat, plans to consolidate its UK operations by concentrating production at its Ellesmere Port facility in Cheshire. The factory has already received a £100 million investment to produce electric vehicles and is currently producing smaller electric vans such as the Citroën e-Berlingo and the Vauxhall Combo Electric. An additional £50 million investment is planned to increase production capacity at Ellesmere Port.
The closure marks the end of more than a century of manufacturing history in Luton, where Vauxhall first opened operations in 1905. The Luton factory has been an important part of the local economy, producing commercial vehicles since 1932 and contributing to the town’s industrial heritage.
Stellantis’ decision follows warnings earlier this year that both UK factories were at risk due to government pressure to meet ambitious electric vehicle sales targets. The ZEV mandate requires automakers to ensure that 22% of their sales are zero-emission vehicles by the end of this year – a goal that many companies are struggling to achieve. Companies face fines of £15,000 for every petrol or diesel car sold above the target, and £18,000 for every van that doesn’t meet the requirements.
Labour’s transport secretary Louise Haigh has maintained a strong stance on the targets despite industry pleas for flexibility. Stellantis had previously considered converting its Luton factory to produce exclusively electric vans, including the electric version of the Vauxhall Vivaro, Britain’s best-selling electric van. However, this plan appears to have been abandoned in light of ongoing challenges.
Employees at the Luton factory were informed of the closure, with the company offering relocation packages for those willing to move to Ellesmere Port and support for those looking for new work. Trade union Unite described the proposal as “a complete slap in the face to our members in Luton”, vowing to support workers and urging the government to intervene.
Rachel Hopkins, Labor MP for Luton South, expressed her deep concern at the announcement, highlighting the factory’s significance to the local economy and its role in Luton’s heritage.
Business Secretary Jonathan Reynolds acknowledged the difficulty of the situation and stated that the transition to electric vehicles should not come at the expense of jobs. A government spokesperson highlighted continued support for the car industry, citing more than £300 million invested to promote zero-emission vehicles and £2 billion to support domestic manufacturing transitions.
The Society of Motor Manufacturers and Traders (SMMT) called the announcement “a major concern” for British car manufacturing and urged the government to review regulations and take action to boost competitiveness.
Stellantis’ move reflects broader concerns within the automotive sector about the ZEV mandate and the push for electrification. Manufacturers including Ford and Nissan have also raised concerns, with Ford recently announcing 800 job cuts in Britain and Nissan warning of potential irreversible damage to the sector if mandates are not relaxed.
Automakers argue that strict targets, combined with a lack of consumer incentives and infrastructure challenges, make it difficult to meet government expectations. The SMMT highlighted that battery electric vehicles accounted for just 18.1% of UK new car sales in October, which does not meet the requirements of the mandate.
Competition from abroad, especially from Chinese manufacturers offering budget EVs, is increasing pressure on British companies. Industry leaders are calling for greater flexibility and support to navigate the transition without jeopardizing jobs and the future of British car manufacturing.