Car maker Stellantis has warned that Brexit trade rules pose a threat to its UK manufacturing operations.
In a submission to a House of Commons inquiry into the supply of batteries for electric vehicles, the company said that the current trade deal with the EU was a “threat to our export business and the sustainability of our UK manufacturing operations”. It urged the government to renegotiate part of the deal or risk factory closures.
The world’s fourth biggest car maker, Stellantis owns Vauxhall, Peugeot, Citroen and Fiat and employs more than 5,000 people in the UK.
Two years ago it committed to making electric vehicles at its factories in Ellesmere Port and Luton. However, this was based on meeting the strict terms of the deal that from next year 45% of the value of EVs should originate in the EU or UK to qualify for trade without tariffs.
Stellantis said it was “now unable to meet these rules of origin” after a surge in the cost of raw materials during the pandemic and energy crisis.
The company called for the current rules to be extended to 2027 or “trade between the UK and EU would be subject to 10% tariffs”. This would make UK production and exports uncompetitive with Japan and South Korea.
“To reinforce the sustainability of our manufacturing plants in the UK, the UK must consider its trading arrangements with Europe,” Stellantis added.
