Stellantis Commits to £50 Million Investment in Electric Van Production

Stellantis has announced a £50 million investment in its Ellesmere Port facility, aiming to establish a new assembly line for electric Vauxhall Vivaros and other midsize zero-emission vans. This decision marks a significant step towards enhancing production capacity, with operations set to commence next year.

The investment follows concerns raised by Stellantis regarding the government’s zero-emission vehicle mandate. The company warns that the plant’s commercial viability is jeopardised if the government continues to impose fines on manufacturers failing to meet electric van targets. The mandate requires 24 per cent of light commercial vehicle sales to be electric, with penalties of £18,000 for each van sold that does not comply.

Stellantis’s move comes on the heels of the closure of its Luton diesel van factory, leading to the loss of 1,100 jobs. The Ellesmere Port facility, once a prominent production site for the Vauxhall Astra, has shifted its focus towards electric vans, currently producing a limited number of units annually.

Emanuele Cappellano, the head of Stellantis’s European region, reaffirmed the company’s commitment to its plans at Ellesmere Port. However, he cautioned that operating under current regulations is becoming increasingly unsustainable. The automotive industry has expressed concerns to Business Secretary Peter Kyle about the distortive effects of the ZEV mandate on market dynamics.

Industry insights indicate that the UK market has seen a gradual increase in electric van uptake, yet they accounted for less than 12 per cent of total van sales this year. Consequently, there are discussions around potentially relaxing the mandate, with a focus on balancing government commitments to support UK-based manufacturers.

The target set under the mandate aims for 70 per cent of new vans sold in the UK to be electric by 2030, with a complete phase-out of internal combustion engine vans by 2035. Currently, the Ellesmere Port plant is operating below optimal levels, producing zero-emission versions of vehicles for export rather than meeting demand in the domestic market.