Stellantis told Britain to change the Brexit deal or see car factories close.

Auto Group’s post-Brexit series of warnings Current rules need to be extended through 2027 Battery supply chain taking longer than expected UK Hunt hints at possible UK investment

May 16 (Reuters) – If the Brexit deal is not quickly renegotiated, British car factories will close and thousands of jobs will be lost, Stellantis warned.

Stellantis (STLAM.MI), which owns 14 brands including Vauxhall, Peugeot, Citroen and Fiat and is the world’s third-largest automaker by sales, will face tariffs when it exports its electric vans to Europe from next year, according to a current deal. told legislators. Stronger post-Brexit rules come into effect.

Stellantis wants the government and the European Union to extend the current rules for parts sourcing through 2027 instead of a planned change for 2024. This is a request echoed by the lobbying body of the European Automobile Trade and Ford (FN).

Britain said it was in talks with Brussels.

“We hope to reach a resolution with the European Union on this,” Prime Minister Rishi Sunak’s spokesman told reporters on Wednesday.

Carmakers say the UK needs to attract more battery production as well as renegotiate tariffs to secure the future of the auto industry.

UK Chancellor Jeremy Hunt has hinted that there will soon be progress on that front.

“We’re keeping an eye on this space as the UK is very focused on securing EVs and manufacturing capacity,” he said at an event on Wednesday.

existential crisis

On Wednesday, Ford issued a separate statement seeking an extension through 2027. Ford says tariffs next year risk slowing the transition to electric vehicles.

“Tariffs will affect both UK and EU-based manufacturers, so it is important that the UK and EU come to the table to agree on a solution,” the US automaker said.

Potential existential challenges facing the UK automotive industry are closely related to the transition to electric vehicles.

Under the trade agreement agreed upon when Britain left the bloc, 45% of the value of electric vehicles sold in the EU from 2024 must come from the UK or the EU to avoid tariffs.

Trouble is, battery packs can account for up to half the cost of a new EV. Batteries are also heavy and costly to travel long distances.

[1/2]A vehicle is photographed on the production line at the Vauxhall Automobile Plant in Ellesmereport, England, on July 6, 2021. Reuters/Phil Noble

Experts have warned that the UK could lose much of its auto industry without a number of EV battery gigafactories since Britain left the EU at the end of 2020.

Only Japan’s Nissan (7201.T) has a small EV battery plant in Sunderland, with a second plant in the works.

Britishvolt, a UK government-backed start-up to build an ambitious £3.8 billion ($4.8 billion) battery factory on a site in northern England, applied for management in January after struggling with financing.

The company was then acquired by Australia’s Recharge Industries, which has yet to reveal plans for the site.

Former Nissan chief operating officer Andy Palmer told BBC Radio urgent action was needed.

“The cost of failure is very clear. There are 800,000 jobs in the UK. Those are basically jobs in the car industry,” said Palmer, who is also chairman of European battery maker InoBat.

“If there is no battery capacity in the UK, that car manufacturer will move to mainland Europe.”

ACEA, Europe’s automotive trade body, has reached an agreement with Stellantis and urged the European Commission to extend the phase-in period, saying the supply chain is not yet ready.

The British’s Society of Motor Manufacturers and Traders, in a filing to Parliament, said that current manufacturing capacities in the EU and UK would not allow the sector to meet requirements for batteries and battery components. said.

These alerts come as automakers around the world choose sites to build new battery gigafactories.

Last week the chief financial officer of Tata Motors (TAMO.NS), owner of Jaguar Land Rover, said they had not decided on a location for the new battery plant, but advanced negotiations were underway.

Reuters reported in February that Tata was considering building an EV battery plant in Spain or the UK.

Stellantis has announced a £100m ($126m) EV investment in its 2021 Ellesmere Port site. It was believed in the filing at the time that enough parts could be made in the UK or Europe to meet the post-Brexit rules, but that cannot be done now.

($1 = 0.7923 pounds)

Reported by Gokul Pisharody of Bengaluru; Edited by Richard Chang

Our Standard: The Thomson Reuters Trust Principle.

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