Biplab Das 
Stellantis, the automotive giant, has warned that it may halt its UK production if the government does not take more significant steps to boost demand for electric vehicles (EVs). Maria Grazia Davino, Stellantis’s top executive in the UK, emphasised the urgency of the situation, suggesting a decision on the future of the company’s UK operations could be made within a year.
Davino’s comments came during a news conference organised by the Society of Motor Manufacturers and Traders (SMMT) in London. She highlighted the challenge posed by the UK’s stringent EV sales mandate, which requires automakers to ensure that 22% of all new cars sold this year are fully electric. Failure to meet this target could result in fines of £15,000 per non-compliant vehicle.
Unlike the European Union, which allows automakers to meet CO2 emissions reduction targets through a mix of hybrids and EVs, the UK mandates a strict percentage of EV sales. According to SMMT data, as of May, fully electric cars accounted for only 16.1% of new car sales in the UK. This shortfall underscores the significant gap between government targets and market reality.
Stellantis’s strategic adjustments
To avoid substantial fines, Stellantis may consider importing fewer fossil-fuel vehicles to the UK, thereby reducing overall sales and improving the percentage of EVs sold. “The fact is that demand is not there,” Davino remarked, pointing out the need for stronger market incentives.
Currently, the UK offers tax incentives for corporate fleets to purchase EVs but lacks subsidies for individual consumers. This absence of consumer incentives, coupled with the higher cost of EVs compared to traditional fossil-fuel vehicles, has hindered broader adoption.
Infrastructure and production challenges
Davino also called for improvements in the UK’s charging infrastructure, which is crucial for supporting the increased use of electric vehicles. Furthermore, she suggested that the UK should allow the company’s EV production to count towards its sales targets, even if some of the vehicles are exported.
Stellantis has invested in the production of electric vans at its Ellesmere Port plant in northwest England and plans to start manufacturing electric vans at its Luton plant in southern England by 2025. Despite these investments, the company’s commitment to UK production hinges on the government’s willingness to create a more supportive environment for EV adoption.
Future of UK production
“Let me be clear, I want to keep the production in the UK,” Davino stated, expressing her hope that the government will take the necessary steps to ensure the viability of Stellantis’s UK operations. However, she also made it clear that the current policy landscape and market conditions present significant challenges.
As the UK prepares for an upcoming election, the automotive industry’s call for supportive policies and infrastructure improvements will likely become a focal point. The outcome of these political developments could significantly influence the future of Stellantis’s production in the UK.
Broader implications
Stellantis’s situation highlights a broader issue faced by many automakers navigating the transition to electric vehicles. The balance between regulatory requirements, market demand, and infrastructure support is critical. Without adequate incentives and infrastructure, achieving ambitious EV targets may prove difficult, potentially leading to production cuts and economic repercussions.
As the automotive industry undergoes this significant transformation, collaboration between government and industry will be essential to ensure a smooth transition to a more sustainable future. Stellantis’s potential withdrawal from the UK serves as a stark reminder of the challenges and the urgent need for effective policy measures to support the EV market.
