Vauxhall owner Stellantis blames EV rules for plans to close its UK van factory.

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Stellantis has blamed Britain's electric vehicle sales rules as it announces plans to close its van factory in Luton, putting around 1,100 jobs at risk.

The owner of Vauxhall and Peugeot said on Tuesday that Britain's challenging EV sales quotas played a role in its decision to consolidate its UK operations at its Ellesmere Port plant in Cheshire.

The group aims to move hundreds of jobs from the Luton site, but the decision is a blow to the UK car industry following plant closures by Honda, Ford and JLR over the past decade.

Last week, Ford announced it was cutting 800 jobs in the UK due to slower-than-expected sales of electric vehicles, while Nissan warned that jobs at its Sunderland plant, the country's largest, could be at risk unless the government relaxes rules for selling electric vehicles.

Business Secretary Jonathan Reynolds unveiled an emergency consultation on Tuesday evening to ease Britain's strict EV quota plans, following industry warnings that public appetite for battery vehicles is lower than expected.

Reynolds told the industry dinner that the Transport Secretary and I have heard loud and clear that you need support to make this transition successful. I want to do everything possible to encourage the uptake of EVs, but I also want to do everything possible to ensure that they are produced here in the UK.

The current plan, modeled after China's policy, calls for a certain percentage of each automaker's annual sales to be zero-emission vehicles, a goal that grows each year.

Ministers decided to stick to their target of phasing out sales of new petrol and diesel cars by 2030, but said several concessions in the plan introduced to make it easier for car manufacturers to avoid punitive fines could be extended under the review. people close to the industry said. And the government.

These include measures that would allow automakers that fail to sell enough EVs to buy credits from competitors to avoid fines, and measures that would allow automakers that fail to meet initial targets to borrow from the future by overachieving later.

Ford UK boss Lisa Brankin welcomed the possibility of a review, saying the current plans were unworkable.

She added: While the end goal is out of the question, demand for electric vehicles is currently lower than expected and not aligned with the mandated trajectory.

Industry group the Automobile Manufacturers and Traders Association said Stellantis' decision was a sobering reminder of the challenges and costs the industry faces in developing new EV technology and transforming a market that is not yet fully ready.

A coalition called Stellantiss has completely insulted our members in Luton, who have been manufacturing Vauxhall vehicles for 120 years. The factory was founded in 1905 and mass production began in the 1930s.

Stellantis warned in June that it could halt production in the UK unless the government did more to stimulate demand for EVs or change its current electrification policy.

On Tuesday morning, Reynolds said the company had made a better decision than before because it had considered moving operations to another European plant.

We might have lost those two keys [production] He told the House of Commons Select Committee on Business to jump the line to another factory.

He added that ministers became aware of the plans to close Luton in early July and hit back very strongly. He added: This is a very difficult day for the people of Luton and we will offer them our full support.

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Stellantis makes vans for the Vauxhall, Peugeot, Citron, Opel and Fiat brands at its Luton and Ellesmere Port plants, and some Toyota models under a joint manufacturing agreement.

The group said it had been in discussions to expand Luton into dedicated EV manufacturing, but the costs of meeting UK sales regulations led the business to make the decision, which it said would potentially contribute to increased production efficiencies.

Stellantis said it planned to spend $50 million upgrading its Ellesmere Port plant as part of the integration process. The group employs around 840 people in Cheshire.

Additionally, a comprehensive support plan for affected employees in Luton, including hundreds of jobs to be relocated to the Ellesmere Port manufacturing site, will be provided alongside dedicated job support within the highly dynamic Luton region.

Additional reporting by Sylvia Pfeifer in London

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