British car plants will close with the loss of thousands of jobs unless the Brexit deal is quickly renegotiated, Stellantis warned, as Ford added his voice to the latest warning from in the car industry since Britain left the European Union.
Stellantis, the No. The world’s No. 3 carmaker by sales and owner of 14 brands including Vauxhall, Peugeot, Citroen and Fiat told lawmakers that under the current deal it would face tariffs when exporting to electric vans to Europe from next year, when tougher post-Brexit rules come into force.
Stellantis wants the government and the European Union to extend current rules on parts sourcing until 2027 instead of a planned change in 2024 – a request echoed by the lobbying body for the European car trade and Ford.
Britain said it was talking to Brussels.
“We hope to make an EU resolution on this,” Prime Minister’s spokesman Rishi Sunak told reporters on Wednesday.
Car makers say that as well as renegotiating tariffs, Britain needs to attract more battery production to secure the future of its car industry.
British finance minister Jeremy Hunt has hinted that there will soon be a breakthrough on that front.
“Watch this space, because we are very focused on making sure the UK gets EV and manufacturing capacity,” he said at an event on Wednesday.
Ford on Wednesday issued a separate statement calling for an extension to 2027. It said tariffs next year could risk slowing the transition to electric cars.
“The tariffs will hit UK- and EU-based manufacturers, so it is important that the UK and EU come to the table to agree a solution,” the US carmaker said.
The most likely existential problem facing Britain’s car industry is closely tied to the transition to EVs.
Under the trade deal agreed when Britain left the bloc, 45% of the value of an EV sold in the European Union must come from Britain or the EU from 2024 to avoid tariffs.
The problem is that a battery pack can account for up to half of a new EV’s cost. Batteries are also heavy and expensive to move long distances.
Experts have warned since Britain left the EU at the end of 2020 that without more EV battery gigafactories the country could lose a large part of the car industry.
Nissan only in Japan 7201.T has a small EV battery plant in Sunderland, with a second on the way.
Britishvolt, a startup that received UK government backing for an ambitious 3.8 billion pound ($4.80 billion) battery plant at a site in northern England, filed for administration in January after struggling to fundraising.
The company was then bought by Australia’s Recharge Industries, which has yet to reveal plans for the site.
Andy Palmer, Nissan’s former chief operating officer, told BBC radio that urgent action was needed.
“The cost of failure is very clear. It’s 800,000 jobs in the UK, which are mainly jobs related to the car industry,” said Palmer, who is also chairman of European battery manufacturer InoBat.
“If you don’t have battery capacity in the UK, then car manufacturers will move to mainland Europe.”
The European car trade body, ACEA, agreed with Stellantis and called on the European Commission to extend the phase-out, saying the supply chain was not ready.
The Society of Motor Manufacturers and Traders in Britain said in a submission to parliament that the current manufacturing capacity in the EU and Britain will not allow the sector to meet the requirements for batteries and battery parts.
The warnings come as carmakers around the world pick sites to build new battery gigafactories.
Last week the chief financial officer of Tata Motors TAMO.NSowner of Jaguar Land Rover, said it had not yet decided on a location for the new battery plant but that advanced talks were ongoing.
Reuters reported in February that Tata was considering building an EV battery plant in Spain or Britain.
Stellantis announced a 100 million pound ($126 million) EV investment at its Ellesmere Port site in 2021. It said in the filing that it previously believed it could produce enough parts in Britain or Europe to meet the post-Brexit rules, but now cannot do so.
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