Why is a leading carmaker urging UK to overhaul Brexit deal?
One of the world’s largest carmakers has told the UK government it will be unable to keep its commitment to make electric vehicles in Britain without changes to the Brexit deal struck with the EU.
Stellantis, the parent company of Vauxhall, Citroën, Peugeot and Fiat, DS, Jeep, Alfa Romeo, Maserati and Abarth, employs more than 5,000 people in the UK, including 1,000 at its electric van factory in Ellesmere Port, Cheshire, and 1,200 at its Luton plant.
The trade and cooperation agreement (TCA) between London and Brussels was signed in 2020, so why is it suddenly an issue?
The carmaker says it is struggling to meet the TCA’s “rules of origin” that require 40% of an electric vehicle’s parts by value to originate in the UK or EU in order for it to qualify for trade without tariffs. This threshold is due to rise to 45% next year and in 2027 it will increase to 55% and the battery pack will have to come from the UK or EU.
Carmakers who do not comply face paying tariffs of 10% when they come to sell their finished vehicles on the other side of the Channel, making it harder for them to compete with cheaper rival models from east Asia.
Stellantis says these requirements make production in the UK unviable, and it is calling on the government to strike a fresh agreement with the EU to maintain existing rules until 2027.
Stellantis says it will have no choice but to wind down operations, putting thousands of jobs at risk. “If the cost of EV manufacturing in the UK becomes uncompetitive and unsustainable, operations will close,” it argues in its submission to a House of Commons inquiry into electric car production.
“Manufacturers will not continue to invest and relocate manufacturing operations outside the UK. The closing of UK
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