Stellantis boss warns 2030 ban could close Vauxhall UK factory

Carlos Tavares says a decision on the future of Vauxhall's Ellesmere Port plant is imminent

Stellantis boss Carlos Tavares says that the newly merged firm will decide the fate of Vauxhall’s Ellesmere Port plant in the coming weeks - warning that the UK government’s ‘brutal’ decision to ban the sales of new combustion engined cars from 2030 could “destroy the business model” for the facility.

The PSA Group - which bought Vauxhall-Opel in 2017 - and Fiat Chrysler recently completed their merger to form the new Stellantis firm, and in his first press conference as the CEO of the expanded company Tavares pledged that it "will not shut down plants as a result of that merger”.

But Tavares did caution that the future of the Liverpool plant, where the Vauxhall Astra is produced, is under review due to the UK’s 2030 ban on all combustion cars aside from a limited number of hybrids.

“If a government creates a situation that destroys the business model, by saying ‘we’re going to ban the sale of that type of car’, we’re going to stop investing,” said Tavares. “If we’re told that in 2030 internal combustion engines cannot be sold in the UK, which we respect as a decision of the country, then we will not invest in combustion engines any more, and we will look to see if there is a business case to invest in other directions.

“We completely respect those rules and will completely comply with those rules, but if they lead to a case there is no business model it leads to a consequence that is clear for everybody.

“There is a limit for the headwinds. If one region is putting up so many barriers that there is no room to find something that creates value then we have to respect that, and then there is an ethical decision from the officers of those companies to make an appropriate decision. If you brutally change the rules and restrict the rules for business there is a problem. The more you place stringent rules on an industry the more there is naturally a limit.

“We are doing our best to avoid that. The decision that there will be no more combustion-engined new car sales in the UK in 2030 stops all investment in combustion-engined cars. So we say there is room for electric cars, but if there is an imbalance between the volume of the UK market and the continental Europe market and you put investment closest to where you sell the most volume, what is left for the UK? That is what people should understand. It is not rocket science, but plain thinking. We are talking to investors and stakeholders, including the government, to try to resolve this.”

As well as the UK’s 2030 ban, Tavares also said Stellantis needed to evaluate the impact of the new UK-European Union trade deal, particularly with its rules of origin that will require an increasing percentage of a vehicle to be manufactured in the UK or Europe to avoid cross-border tariffs.

He said those rules were “very aligned with the Stellantis strategy, which is about engineering and manufacturing electric vehicle components in Europe.” But he added: “So if we can comply with those rules of origin requirements, and I believe we can, where should we be putting investment based on the markets where those products are sold? This is still under review.

“Should we put electric vehicle-related investments in the UK or Europe? They would both contribute to rules of origin requirements so both could work, but of course the biggest market is on the continental Europe side, so from that perspective it could be best to put it in Europe. It depends also on the UK government’s willingness to protect some level of its automotive industry. 

“We are now deciding on where we are going to put those investments, and we do not forget we have a strong asset in Vauxhall, which is warm to the hearts of UK consumers. We have not made a decision yet, but we will make a decision within the next few weeks.”

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