Stellantis may be forced to close its Ellesmere Port and Luton plants if the UK government doesn’t ease electric vehicle (EV) sales quotas and stimulate demand. This is the stark warning from Maria Grazia Davino, Stellantis UK managing director, made during a press conference at the SMMT International Automotive Summit.

Davino criticised the government’s approach, describing it as “stupid” for not collaborating with the automotive industry to protect jobs. While Stellantis doesn’t want to abandon the UK, she stressed that the company might have no choice if conditions don’t improve.

The “unreasonable” Zero Emission Vehicle (ZEV) mandate, which sets increasing EV sales quotas, was a particular concern. Davino argued that more incentives, such as VAT reductions, are needed to boost sluggish demand and highlighted the necessity of incentives for businesses to buy electric vans, warning that without these changes, Stellantis might relocate production.

Stellantis currently builds the Vauxhall Vivaro and its Citroen, Fiat, Peugeot and Toyota badged siblings at its factory in Luton, while the Ellesmere Port facility — which recently celebrated its 60th birthday — produces compact electric vans for each of the brands.

Stellantis could close Luton factory

“You have to make strategies that are based on efficiency,” she said, emphasising her desire to keep UK production. However, with demand lagging, she urged the government to act, warning of significant consequences for UK manufacturing if the situation remains unchanged.

Stellantis has proposed counting UK-made electric vans as cars to make the ZEV targets more attainable. This issue is compounded by the UK and European automotive industry’s struggle to avoid tariffs on EV exports and imports, with a temporary suspension of a Brexit-related clause earlier this year.

Davino also noted that the government’s EV policies are straining Stellantis’s business model, forcing the company to invest more than market demand justifies, making UK production increasingly unviable.

In April, Stellantis CEO Carlos Tavares had similarly criticised the ZEV mandate, calling the quotas “terrible” and noting they were double the market’s demand.

Phil Huff
Latest posts by Phil Huff (see all)
Published on