Vauxhall to decide on UK plant future ‘in the next few weeks’

Owners of Vauxhall Citroen Peugeot have said that a decision on the future of their UK plants will be taken “in the coming weeks” amid a dispute over government electric car quotas. Carlos Tavares has announced that Stellantis is close to making a decision about the future of Ellesmere and Luton.

Tavares stated that Stellantis will make a “correction”, to its UK business, in the next few weeks to respond to the damage caused by the government’s mandate for zero-emissions vehicles.

Carmakers are increasing pressure on government subsidies to EV sales in a race for compliance with the mandate. The initiative aims to manage the phase-out and switchover of new petrol and Diesel cars over the next six year. He said, “We have reached a point now where we must make a final decision. This will occur in the coming weeks.”

Bloomberg reported that Tavares stated the company had been discussing with officials how the UK Government could “help stimulate demand” for several months. Tavares said that the EU’s decision to impose extra tariffs on Chinese electric vehicles will speed up the closure of car giants’ plants in Europe, as Chinese and European auto bosses competed at the Paris motorshow.

Tavares stated that the traditional car powerhouses, Germany, France, and Italy, would be the most affected by the new duties. The boss of the group that owns Fiat, Jeep, and Chrysler argued that tariffs are a “good tool for communication” but have side effects. He said that levying levies on imported vehicles would encourage China’s establishment of its own factories in the continent. Existing car companies could be put at risk.

Tavares stated that the best way to avoid Chinese customs duties is to build in Europe. He added that “you are speeding up the need to close plants” in Europe. This is a risk for traditional carmakers from Germany, Italy, and other countries.

Tavares mentioned the Chinese EV giant BYD which is building its European assembly plant in Hungary. He said that Chinese carmakers would not build cars in Germany, France, or Italy because of the cost disadvantages they would face, beginning with energy costs. Germany, for example, is opposed to the EU’s proposal of extra tariffs up to 35%. They fear that their joint ventures with China could be affected.

China responded by imposing its own tariffs on EU Brandy , affecting French companies like Remy Cointreau or Hennessy. Sources say that both sides are continuing to speak, but there is little hope of a resolution before 30 October when China must return with a solution.

Stella Li is the vice president of BYD. She used the Paris auto show to criticise EU tariffs. However, she also said that the company would make most of the cars sold in Europe on the continental continent. This would not only avoid tariffs, but it could also be dangerous for competitors such as ‘s troubled Volkswagen.

Li said that politicians should avoid tariffs because they add more costs to the auto industry and confuse it. Olaf Scholz expressed his hope for an agreement before the end of the month in Berlin while speaking alongside Ursula von der Leyen.

Tariffs will be imposed if no agreement has been reached by the 30th October. There is still the possibility of a pause after that, either manufacturer by manufacturer, or sector wide, which China wants.

Tavares, as well as Martin Sander the head of sales for Volkswagen passenger cars, both said that prolonging the switch to EVs is dangerous.

Tavares said to the Financial Times that “making a longer transition is a trap.” When you take a longer time to transition, you are not replacing the old world with the new. Add the new world on top of the old.

The EU has already proposed a tariff of up to 44% on electric vehicle imports in November to try and limit the damage caused by the competition from China.

As they struggle to meet the 2035 ban, several manufacturers have scrapped their plans to phase-out the internal combustion engine.