Vauxhall-maker demands change to Brexit deal in threat to UK factories – Metro.co.uk

Share this article via facebookShare Share this article via whatsapp Share this article via messenger More than 5,000 jobs are at risk if Stellantis is forced to close its UK factories (Picture: Reuters)

One of the world's largest carmakers has called on the Government to renegotiate the Brexit deal or they may not keep their commitment to make electric vehicles in the UK.

Stellantis, which makes Vauxhall, Citroen, Peugeot and Fiat, warned their UK investments were in the balance due to the terms of the trade agreement.

The firm employs more than 5,000 people in the UK and had pledged to making EV cars at its Ellesmere Port and Luton plants two years ago.

But in a submission to a Commons inquiry, Stellantis said the Brexit deal was a threat to our export business and the sustainability of our UK manufacturing operations.

It prompted Sir Keir Starmer to say we need a better Brexit deal so Vauxhall and other big employers can continue operating in the UK.

Stellantis want existing rules maintained until 2027, rather than next year's planned changes, which state 45% of an electric car's value should originate in the UK or EU to qualify for trade without tariffs.

The rising cost of raw materials during the pandemic and energy crisis meant Stellantis was unable to meet these rules of origin.

It said the upcoming rules would see 10% tariffs on trade with the EU and make domestic production and exports uncompetitive with Japan and South Korea.

The company said that would mean manufacturers will not continue to invest and will relocate.

To reinforce the sustainability of our manufacturing plants in the UK, the UK must consider its trading arrangements with Europe, Stellantis told the inquiry, listing Honda's closing of its Swindon site and investment in the US as examples of its impact.

Stellantis also warned there will be insufficient battery production in the UK or Europe to meet government targets in phasing out petrol and diesel vehicles by 2025 and 2030.

If we are unable to rely on sufficient UK or European batteries, we will be at a major competitive disadvantage. In particular against Asian imports, they said.

We need to reinforce the competitiveness of the UK by establishing battery production in the UK.

Electric cars and batteries were among the final parts of the Brexit deal agreed between then Prime Minister Boris Johnson and President of the European Commission Ursula von der Leyen in 2020.

Professor David Bailey said this poses an existential threat to the UK car industry.

The Birmingham Business School academic told the Today programme that increased tariffs and stricter rules in post-Brexit trading agreements will put British manufacturers at a competitive disadvantage.

From 2024 cars must include 59% locally produced materials and components, such as batteries, to avoid a 10% export tariff on cars exported to the EU from the UK.

Prof Bailey said: I think there is a kind of existential threat to the UK car industry.

The rules in the Brexit agreement don't help the UK car industry either. If they can't meet those rules, they'll face a 10% tariff on cars made in the UK and exported to the EU and vice versa. That will put the UK at a competitive disadvantage.

He added: Car makers have been saying for some time, they can't meet those rules as they tighten up, and they're going to potentially be facing tariffs.

Labour leader Sir Keir said the Brexit deal needed to be improved, telling the BBC: We need a better Brexit deal. We will make Brexit work.

That doesn't mean reversing the decision and going back into the EU but the deal we've got, it was said to be oven-ready, it wasn't even half-baked.

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Vauxhall-maker demands change to Brexit deal in threat to UK factories - Metro.co.uk