Stellantis, the parent company of Vauxhall, Fiat, Citroen and Peugeot, will decide the fate of its UK factories within weeks, amid ongoing disagreements with the government over electric vehicle (EV) sales targets.
In June, Stellantis warned it may have to close its factories in Ellesmere Port and Luton unless ministers reconsider rules requiring a certain percentage of EV sales. These facilities, which produce electric cars and vans and employ more than a thousand workers, remain at risk as the company pushes for changes to the Zero Emission Vehicle (ZEV) mandate.
The ZEV mandate, introduced this year, requires 22% of cars sold by manufacturers to be electric, a figure that will increase annually until 2030. Companies that don’t meet these targets face fines of £15,000 per non-compliant vehicle or have to trade carbon credits. with competitors.
Stellantis CEO Carlos Tavares has warned that current regulations are forcing manufacturers to sell more electric vehicles than consumers demand, leading to significant price cuts to boost sales. Tavares emphasized the need for government support to stimulate consumer demand during a recent Bloomberg interview, noting that a decision on the future of the factories would be made soon.
The challenge for carmakers comes as sales of electric vehicles rose 25% to a record 56,362 in September, but mainly due to demand from fleet operators rather than private consumers. Despite heavy discounts, sales of private electric vehicles rose by just 3.7% year-on-year, indicating the need for further incentives to make electric vehicles more attractive to individual buyers.