Editor's Pick

Stellantis to close Luton van factory in UK owing to country’s strict EV mandate

Stellantis NV, owner of the Vauxhall brand, has announced plans to close its van manufacturing plant in Luton, England.

The move comes as the automaker faces mounting pressure from the UK’s stringent zero-emission vehicle (ZEV) sales mandate.

The Luton factory’s production will be relocated to Stellantis’s Ellesmere Port facility, which focuses exclusively on electric vehicles (EVs).

The company cited efficiency improvements and plans to invest an additional £50 million ($63 million) in the Ellesmere Port plant as part of this transition.

The closure is expected to impact around 1,100 employees in Luton, with hundreds of jobs being transferred to the revamped electric-only facility.

Stellantis’ share price was down by 4.70% on Tuesday.

UK’s zero-emission mandate pushes automakers to adapt

The UK government’s ZEV mandate requires automakers to ensure that 10% of new van sales are zero-emission in 2024, a figure set to rise to 70% by 2030.

Non-compliance can lead to fines of up to £15,000 per vehicle, though companies have the option to trade compliance credits or make up deficits in subsequent years.

Stellantis has previously warned about the potential impact of these strict targets, calling for more government incentives to boost EV adoption.

Other automakers in the UK have echoed similar concerns, arguing that current consumer demand for EVs is insufficient to meet the ambitious sales goals.

Investment in Ellesmere Port: A shift towards electric vans

Stellantis has already invested £100 million in transforming the Ellesmere Port facility into an electric-only plant, where it produces small EV vans under its Vauxhall, Citroën, Peugeot, Opel, and Fiat brands.

The additional £50 million planned investment is aimed at increasing efficiencies and capacity to handle the production transferred from Luton.

While the government welcomed Stellantis’s investment in Ellesmere Port, it acknowledged the uncertainties faced by employees affected by the closure in Luton.

Development a “major concern” for UK auto industry: SMMT

The Society of Motor Manufacturers and Traders (SMMT) called Stellantis’s decision a “major concern” for the UK automotive sector.

It highlighted the financial and technological challenges of transitioning to EV production while consumer demand remains subdued.

“This is a sobering reminder of the challenges this industry faces,” the SMMT said.

“The UK has arguably the toughest targets and most accelerated timeline in the world, yet lacks the incentives necessary to drive sufficient demand.”

Industry data showed that EV production, including hybrids, dropped by 7.6% in the first half of 2024.

The automotive sector has repeatedly urged the government to offer stronger incentives, such as subsidies or tax breaks, to make EVs more attractive and affordable to consumers.

Government response and support measures

In response to the concerns raised, the UK government reiterated its commitment to supporting the transition to zero-emission vehicles.

A spokesperson highlighted the £300 million funding allocated to drive EV adoption and emphasized the importance of transitioning the automotive industry while safeguarding jobs.

Despite these assurances, Stellantis’s announcement underscores the broader challenges faced by manufacturers as they navigate the evolving regulatory and market landscape.

The post Stellantis to close Luton van factory in UK owing to country’s strict EV mandate appeared first on Invezz

You May Also Like

Latest News

LONDON (Reuters) – Demand for London’s most expensive homes cooled last month as high earners worried about the possibility of tax increases by Britain’s...

Latest News

Investing.com — The idea of a U.S. Sovereign Wealth Fund has been gaining attention, with both former President Donald Trump and current President Joe...

Latest News

(Reuters) – Bank of Canada Governor Tiff Macklem opened the door to increasing the pace of interest rate cuts, the Financial Times reported on...

Editor's Pick

Venezuela, a country blessed with natural wealth and stunning landscapes, faces a tourism paradox. Despite its abundant resources, the nation struggles to attract international...

Disclaimer: Bullsmarketdominators.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2024 Bullsmarketdominators.com

Exit mobile version