Stellantis CEO calls for a review of UK plants amid new closure warnings

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The owner of Vauxhall, Stellantis, has started a strategic evaluation of its two UK van manufacturing facilities to perhaps close them permanently, according to CEO Carlos Tavares.

As part of a dispute with the UK government over its resistance to the ZEV mandate, which is intended to increase the sales of electric vehicles, Stellantis is threatening to close the Ellesmere Port and Luton operations.

During the company’s results call last week, Tavares informed analysts, “The ZEV mandate is hurting our business model significantly, and this is triggering a strategic review of our business model, including the manufacturing footprint.”

According to Tavares, the company and the government are currently engaged in “an intensive and productive dialogue” regarding the mission. He continued, “At this point, we don’t have the answers we need.”

The CEO’s remarks intensify Stellantis’s criticism of the mandate, which requires brands to raise their electric vehicle sales to 22% of their total new car sales in the UK this year. While companies can lower this target through various loopholes, failing to meet it results in a £15,000 penalty for each combustion-engine vehicle sold above the limit.
Stellantis has made a strong case against the goal, claiming that demand does not equal it. Maria Grazia Davino, the company’s UK director, first brought up the prospect of Stellantis stopping van manufacturing due to the problem in June.

The new Labour government is facing its first threat from an automaker to shut down a major manufacturing facility if certain criteria are not satisfied, and Tavares’s newest remarks increase the stakes even more.