Stellantis, the parent company of Vauxhall, has warned that it may have to close its UK factory in Ellesmere Port if the government does not renegotiate the Brexit deal. The company said that the new rules of origin, which will come into effect in 2024, could make producing cars in the UK uneconomical.
The company said that the current deal would make it uncompetitive to manufacture electric vehicles in the UK, as it would face tariffs of 10% on exports to the EU.
Stellantis is one of many car companies, and there are concerns about how Brexit will affect the economy of the UK car industry. Jaguar Land Rover has warned that it could be forced to move production overseas if the government does not act.
The government is committed to supporting the car industry. Still, it has yet to announce concrete plans to address the concerns of Stellantis and Jaguar Land Rover.
The closure of the Ellesmere Port factory would be a significant blow to the UK car industry. The plant employs around 4,000 people and produces the Vauxhall Astra and Opel Corsa models.
The plant’s closure would also knock on the supply chain, leading to the loss of jobs at other businesses that support the plant.
Government has a tricky balancing act to perform. It needs to support the car industry, a significant employer in the UK, but it also needs to respect the terms of the Brexit deal.
It is still being determined what the government will do to address the concerns of Stellantis and Jaguar Land Rover. However, the future of the UK car industry is under threat.
Here are some possible solutions that the government could consider:
- Renegotiate the Brexit deal to remove or reduce the tariffs on exports of electric vehicles to the EU.
- Provide financial support to the car industry to help offset the costs of Brexit.
- Introduce measures to make it easier for car companies to source parts from the UK.
The car industry’s concerns require prompt attention from the government. The UK could lose a significant manufacturing sector and thousands of jobs if it does not.
In addition to the economic impact, closing the Ellesmere Port factory would also blow the UK’s reputation as a manufacturing hub. Car manufacturing has a rich history in the UK. Cars and the closure of the Ellesmere Port factory indicate that the UK is no longer a competitive place to manufacture cars.
The government must take necessary actions to prevent the Ellesmere Port factory’s closure and protect the UK car industry. The future of the UK’s manufacturing sector and thousands of jobs depend on it.
Here are some additional details about the impact of Brexit on the UK car industry:
- The UK car industry is worth £70 billion to the UK economy and employs over 800,000 people.
- The industry is highly export-oriented, with 80% of cars made in the UK being exported.
- The industry faces several challenges, including the rise of electric vehicles, the cost of Brexit, and the global chip shortage.
- The car industry has received support from the government through various measures, such as a There is a £1 billion investment fund and a new battery gigafactory being established.
- Whether these are yet to be determined will happen measures will prevent factory closures and job losses in the UK car industry.
In addition, the closure of the Ellesmere Port factory would significantly impact the local community. The plant provides many jobs and is an essential source of employment in the area, and its closure would lead to the loss of hundreds of jobs. The plant is also a substantial source of revenue for the local council, and its closure would lead to a loss of tax revenue.
The closure of the Ellesmere Port factory would be a significant blow to the UK car industry and the local community. The government must implement measures to prevent this from happening.
Here are some other things the government could do to support the car industry:
- Provide grants or tax breaks to help car companies invest in new technologies like electric vehicles.
- Make it easier for car companies to import parts from the EU.
- Work with the EU to reduce tariffs on exports of UK cars.
- Invest in R&D to help the car industry develop new products and services.
The government should adopt a comprehensive approach to support the car industry and stimulate job creation in the UK. This will help the industry to thrive and prosper.
‘Running out of time
Trading rules around electric cars was one of the last issues settled in the Brexit negotiations in 2020.
But Stellantis warned the current rules meant manufacturers could relocate abroad, pointing to BMW’s decision to make its new electric Mini in Germany and Honda’s closure of its plant in Swindon.
As well as trade barriers, the need for more electric car battery plants in the UK remains a crucial issue compared to the US, China and the EU, which subsidize electric car makers.
Gigafactory
Earlier this week, French President Emmanuel Macron hosted Tesla’s Elon Musk, who hinted he might invest in a battery plant – or gigafactory – in France.
The Spanish government is currently trying to attract Jaguar Land Rover, the UK’s largest carmaker, to build a gigafactory in Spain.
With the rules tightening again in 2027, experts believe UK exporters will only find it possible to sell cars overseas tariff-free if they can source batteries domestically.
