Stellantis warns that Brexit import duties could force EV production closures

Stellantis has warned the UK government that “if the cost of EV Manufacturing in the UK becomes uncompetitive and unsustainable
operations will close.”

The issue, Stellantis highlighted, is the cost associated with importing batteries from Europe. In a response to a Commons inquiry on EV production, it said: “If we source batteries from mainland Europe and China, as currently planned, our UK Stellantis plants will also be at a competitive disadvantage due to the higher logistics costs that we will face to transport the batteries from mainland Europe to the UK. To
reinforce the sustainability of our manufacturing plants in the UK, the UK must consider its trading arrangements with Europe.”

It added that the closing of UK Manufacturing will see significant job losses, the loss of a skilled workforce and a negative impact to the UK economy.

It has called for the establishment of battery production in the UK in order to compete with Asian brands. If this is not done, it said that UK based manufactures will face “10% import duties which will make domestic production uncompetitive against Asian players.”

The brand also expressed concerns over the Rules of Origin phasing in from 2024. Until January 1, 2024, at least 40% of the content of EVs and 30% of batteries must originate from the EU or the UK. This is increased to 45%  and 50-60% respectively until January 2027.

Stellantis said that it had planned on meeting the Regional Value Content of the vehicles at 45% to avoid import duties on trade flows between the EU and UK. But, due to the “various external headwinds”, including the raw material cost inflation and supply issues, its is now unable to meet these Rules of Origin.

It added: “Our request to government is to gain agreement with the EU to maintain the current Rules of Origin until 2027 and to review PEM operating rules, in particular with Serbia and Morocco.

“We are in danger of limiting affordable access to mobility.”