Home Business NewsBusinessAutomotive News Car makers face an ‘existential threat’ and could pull out of the UK unless Sunak changes Brexit deal

Car makers face an ‘existential threat’ and could pull out of the UK unless Sunak changes Brexit deal

by LLB staff reporter
17th May 23 1:05 pm

The Prime Minister is being urged to renegotiate the UK’s Brexit deal as Vauxhall’s parent company Stellantis has warned unless there are changes to the Trade and Co-operation Agreement (TCA) with the European Union, they will not be able to keep their commitment to make electric vehicles (EVs)  in Britain.

The car industry is facing an “existential threat” without these changes and thousands of jobs are now at risk.

The Labour leader Sir Keir Starmer has said that “we need a better Brexit deal” to ensure companies like Vauxhall will continue to operate in the UK.

This issues has been raised with Brussels by the Business and Trade Secretary Kemi Badenoch and there has been a pre-arranged meeting made with Stellantis bosses on Wednesday.

Badenoch has raised car manufacturers concerns to the Chancellor Jeremy Hunt and the Foreign Secretary.

The British Chambers of Commerce (BCC) conference was told by Hunt that there is world-wide pressure on the supply of electric vehicle batteries.

Hunt said, “The reality is there is a supply shortage. Everyone is trying to develop supply of EV batteries. We need to have that supply here in the UK.

“All I would say is watch this space because we are very focused on making sure the UK gets that EV manufacturing capacity.”

Professor David Bailey, from Birmingham Business School, said: “I think there is a kind of existential threat to the UK car industry.”

He told BBC Radio 4’s Today programme: “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.”

The Labour leader told BBC Breakfast, “Of course we want a closer trading relationship, we absolutely do. We want to ensure that Vauxhall and many others not just survive in this country but thrive.

“Because there are jobs bound up, there are families watching this morning either employed by Vauxhall or a similar place who are deeply worried about what this means.

“So yes 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.”

Stellantis told MPs in the inquiry, “To reinforce the sustainability of our manufacturing plants in the UK, the UK must consider its trading arrangements with Europe.”

The company warned that there will be “insufficient battery production” in the UK or Europe which will not meet the government’s targets to eventually phase out petrol cars by 2025 and diesel vehicles by 2030.

Stellantis who owns Citroen, Peugeot and Fiat and employs more than 5,000 workers in the UK said, “It we are unable to rely on sufficient UK or European batteries, we will be at a major competitive disadvantage. In particular against Asian imports.

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

A Government spokesman said: “The Business and Trade Secretary has raised this with the EU and is determined to ensure the UK remains one of the best locations in the world for automotive manufacturing, especially as we transition to electric vehicles.

“We are supporting the industry through the Automotive Transformation Fund and Advanced Propulsion Centre to develop a high-value end-to-end electrified automotive supply chain in the UK and support cutting-edge automotive technologies.

“In the coming months, the Government will build on these interventions with decisive action to ensure future investment in zero emission vehicle manufacturing.”

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