A MAJOR car brand will decide whether to close its UK plants within “the next few weeks”.
Motoring giants Stellantis, who are Europe’s second-biggest maker of cars, is weighing up its options after months of discussions with the Government over their proposed quotas for electric vehicles.
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Stellantis currently owns a number of famous brands, ranging from the likes of Citroen, Fiat, Jeep, Peugeot and Maserati.
Vauxhall is also among those marques, and the iconic British firm continues to maintain its factories in Ellesmere Port and Luton – having done so for decades.
However, in recent months, Stellantis UK have suggested that they could be forced to shut these plants thanks to the Government’s electrification rules.
The ZEV Mandate, which aims to limit the sales of new petrol and diesel vehicles ahead of a 2035 ban, has been critised by the car giant for its proposed penalties on car-manufacturing.
What is the ZEV Mandate?
Many Brits might be aware that the Government is enforcing a ban on the sale of new petrol and diesel cars and vans from 2035.
This was originally set for 2030 but PM Rishi Sunak pushed the deadline back last year.
However, Mr Sunak did not announce any relaxation in the ZEV Mandate, which requires firms to produce progressively fewer internal combustion models in the years running up to the cut-off.
ZEV stands for Zero Emission Vehicle, with manufacturers ordered to have a certain percentage of total sales made up of such motors in each year.
Most companies are doing this by increasing their focus on battery electric vehicles (BEVs).
Brands including Ford, Jaguar Land Rover and Vauxhall have all announced they will be electric only by 2030.
Many are making the transition five years ahead of schedule as the mandate requires 80% of sales to be ZEVs by that year anyway.
Failure to do so can see companies slapped with fines of up to £1,500 for each petrol or diesel car they produce over the 20% threshold.
ZEV requirements per year as a % of sales:
2024 – 22%
2025 – 28%
2025 – 33%
2027 – 38%
2028 – 52%
2029 – 66%
2030 – 80%
2031 – 84%
2032 – 88%
2033 – 92%
2034 – 96%
2035 – 100%
Back in June, the company’s UK boss, Maria Grazia Davino, said: “Stellantis UK does not stop, but Stellantis production in the UK could stop”.
Now, in an update made during the Paris Motor Show, boss Carlos Tavares further urged ministers to relax the rules around EV production in a warning that potentially puts 2,500 workers at risk.
Speaking to Bloomberg TV on Monday, he said: “We are now reaching a point where we have to make a decision, and that will happen in the next few weeks.”
This comes at a time when demand for electric cars across Europe is experiencing a downturn, with consumers seemingly hesitant to switch from combustion motors to EVs due to their high prices and concerns around charging infrastructure.
Tavares called on the Government to “help to stimulate the demand” for EVs and cemented that the current threshold for green sales is approximately double the “natural” levels of demand.
Previously, Tavares has said the ZEV Mandate is “hurting significantly our business model” and claimed it was “triggering a strategic review” – which included their manufacturing footprint.
He added that, at the time, the company was in an “an intensive and productive dialogue” with the Government over the rules.
Stellantis currently produces electric cars and vans at its Ellesmere Port facility, while their larger petrol and diesel vans are made in Luton – where they plan to commence EV production later this year.
This comes as Stellantis were forced to halt production of the EV version of the Fiat 500 last month – due to low demand.
The popular hatchback remains one of the world’s best-loved and most recognisable motors, but the all-electric version, known as the Fiat 500e, has failed to match the acclaim of the combustion model and has suffered a slump in sales.
Elsewhere, companies like Ford have already said they will reduce production of traditional cars to avoid the fines, while the industry body has demanded more help for firms.
And back in the summer, Audi revealed they were “considering the early end of production” of one of its most successful EVs.
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