The UK needs its own battery supply to protect against future trade wars with the European Union, Stellantis CEO Carlos Tavares has warned.
Currently, the trade agreement between the UK and EU allows the tariff-free shipment of parts across the border, but any collapse in that agreement could jeopardise the UK vehicle manufacturing industry, Tavares told journalists on a call. “The day something goes south in the deal between the UK and continental Europe, then the market will suffer enormously,” he said.
Stellantis is currently “ramping up” production of electric compact vans in its Ellesmere Port plant after switching production from the Vauxhall/Opel Astra, Tavares said. Stellantis is also investing in switching Vauxhall’s Luton van-making facility to produce electric versions as well, he added.
The UK works as a manufacturing location for Stellantis because it is able to import batteries from the EU tariff-free. “Currently, the UK is protected because we can source batteries from continental Europe,” Tavares said. “If at any point in time, this is not working any more, then the UK could be caught in a position where you can only sell EVs but have no batteries for them.”
The UK will start phasing out sales of petrol and diesel cars and vans in 2030, with certain hybrid models staying on sale for a further five years. The government has yet to define which types of hybrid will be allowed.
Vauxhall has said it will accelerate its plan to sell only EV cars and vans in the UK by 2028, two years earlier than needed.
The government's hopes of building a battery production network capable of supplying locally built BEVs hit a barrier with the collapse of Britishvolt, which had planned to build a gigafactory in the north-east. Aside from Nissan partner Envision AESC, no other cell maker has committed to large-scale production in the UK.
The UK’s shrinking vehicle market could be a barrier to investment, Tavares warned. “A big problem of the UK is to keep a size of the market that would support the investment of battery supply from the UK to the UK,” he said.
Tavares remarks about supplying its UK plants with batteries from continental Europe appear to pour cold water on the idea that it might source locally without the imposition of a tariff barrier.
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