Vauxhall owner Stellantis, which also owns Citroen, Fiat and Peugeot, has announced plans to close its van manufacturing plant in Luton, putting approximately 1,100 jobs at risk.
A Century of Vehicle Manufacturing in Luton
This decision comes as part of a strategic consolidation of the company’s electric vehicle (EV) production in the UK, with operations shifting to the Ellesmere Port facility in Cheshire.
Stellantis cited the UK’s Zero Emission Vehicle (ZEV) mandate as a key factor in the decision, though this explanation has been met with scepticism by industry experts and unions alike.
Since its opening in 1905, the Luton plant has been producing Vauxhall vehicles for over a century, with commercial vehicle assembly starting with the ‘VYC’ and ‘VXC’ panel vans in 1932. Over the years, Luton has manufactured various Vauxhall commercial vehicles, most recently the Vivaro, which started production in 2001 and has recently been given a significant refresh.
At its peak, the factory employed around 37,000 people, though this number has shrunk significantly over recent decades.
Commercial Vehicle Industry Response
The announcement has drawn criticism from Unite, the trade union representing workers at the Luton site. The proposal was described as a “complete slap in the face” for its members, with Unite calling on the government to intervene. “Whatever the positive benefits this plan may have for Ellesmere Port, that is not acceptable. We stand ready to support our members in doing whatever we can to ensure that historical vehicle manufacturing is maintained in Luton and we call on the government to do the same.”
Stellantis plans to consolidate its UK operations at Ellesmere Port, which already builds compact electric vans, including the Vauxhall Combo Electric and Citroen e-Berlingo.
The Cheshire facility will receive a £50 million investment to expand its capacity to include medium-sized electric vans. This follows a £100 million investment in 2021 to transform Ellesmere Port into the UK’s first EV-only volume manufacturing plant.
Carlos Tavares, Stellantis’s CEO, had previously warned that both Luton and Ellesmere Port faced an uncertain future due to the UK government’s ZEV mandate. The mandate requires manufacturers to ensure that EVs make up a minimum of 22% of car sales and 10% of van sales in 2024, with significant fines for failing to reach those targets.
In response to the threats, Unite general secretary Sharon Graham said: “Carlos Tavares needs to avoid indulging in counterproductive threats and game playing that will only damage Stellantis. If he threatens either plant then he will be met with the collective strength of Unite’s members.”
Stellantis isn’t alone in criticising the rules, with other industry leaders arguing that stagnating consumer demand and a lack of government incentives make compliance challenging.
However, according to a report in The Guardian, Natalie Knight, the chief financial officer at Stellantis until last month, told investors at the conference hosted by Bank of America that the UK was “a spot where we’re confident we’re going to be able to hit ZEV mandate by the end of the year.”
While Stellantis cites the ZEV mandate, other industry experts are unconvinced about their reasoning. Dr Andy Palmer, former Aston Martin CEO, stated: “Luton exports something like 75% of its production, so it’s not related to [the ZEV mandate] at the moment. Luton doesn’t produce any EVs.”
Mike Hawes, the chief executive of the Society of Motor Manufacturers and Traders
— the organisation that represents the UK’s motor industry — called for government help in a challenging market. “Times have changed and not for the better,” said Hawes. “The cheaper raw materials have not come to pass. Nor the lower interest rates. Nor the cheaper energy. As a result, we now expect to sell 116,000 fewer electric vehicles this year than when the mandate was announced. No one wants that. Not us, not government, not the charging sector. They need EVs on the road, not a notional share of a constrained market. They need that reassurance to preserve their £6 billion investment to 2030. But the mandate could cost us around £6 billion this year alone.”
Government Support
The government has pledged £300 million to support the automotive sector to boost EV adoption. Following the Luton closure announcement, Business Secretary Jonathan Reynolds acknowledged the gravity of the situation, describing it as a “difficult day for Luton.” He promised a consultation on potential changes to the ZEV mandate, but stopped short of offering an immediate solution for the affected workers.
Despite this, the closure reflects broader challenges in the UK’s transition to electric vehicles. While EV sales have grown — accounting for nearly one in four cars registered in October, but just 7.9% of van sales — industry insiders argue this growth relies heavily on unsustainable discounting rather than robust consumer demand.
Stellantis’ decision to close Luton is framed as an effort to achieve greater production efficiency, with the company emphasising its commitment to supporting affected workers. Relocation packages to Ellesmere Port will be offered, alongside retraining and job placement assistance. However, these measures do little to assuage the concerns of workers and the local community, who face the loss of a site deeply ingrained in Luton’s identity.
Production of conventional petrol and diesel vans, currently the mainstay of the Luton plant, will be transferred to France, to factories within the EU where 75% of current production ends up.
