The UK car industry is not ready for the consequences of Brexit

At the risk of sounding like a broken record, the UK automotive industry is calling on the government to develop an industrial strategy that will create attractive investment conditions for cutting-edge automotive production.

Mike Hawes, CEO of the Society of Automotive Manufacturers and Traders (SMMT), said on Wednesday that "at a time when every country is accelerating its transition to zero-emission vehicles and global competitors are offering billions to attract investment in their industries, a pragmatic a solution must be found quickly."

His comments came after Stellantis warned British MPs that "if the cost of producing electric vehicles in the UK becomes uncompetitive and unsustainable, production will be shut down." The automaker's statement highlights that manufacturers will face difficult conditions with rules of origin requirements under the UK-EU trade deal effective post-Brexit from 2024. To be eligible for zero-tariff trade, UK-made electric vehicles must have their value from the UK or the EU in 2024. In 2027, the local content rule increases to 65%.

Stellantis operates two car factories in the UK, Ellesmere Port and Luton, which employ over 5,000 people. It states that due to "various external headwinds", including raw material prices, it is unable to comply with these rules of origin. This will add a 10% duty on exports to Europe, making them uncompetitive with Asian players. “This is a threat to our export business and the sustainability of our manufacturing operations in the UK,” the automaker added.

Speaking at parliamentary consultations, Stellantis also noted that if manufacturers continue to source batteries from mainland Europe and China, higher logistics costs will be passed on to consumers. In turn, this will affect the availability of electric vehicles.