One of the world’s largest car manufacturers may pull out of the UK

Stellantis has two factories in the UK, which manufacture vehicles under brands such as Vauxhall, Fiat and Opel. It is planned to gradually transfer both plants to the production of electric cars, but here comes the problem. The company claims it may be at a competitive disadvantage in the future due to tariffs on batteries shipped between the UK and other parts of Europe,

It will have to pay a 10 percent duty on exports to the European Union because of British rules on the provenance of parts.

If the costs of producing electric vehicles in the UK become uncompetitive and unsustainable, the company will close its factories

They announced. The move would not be without precedent, as BMW, for example, previously decided to move production of electric minis to China, but Honda also chose to invest in electric vehicles in the US after closing its British site.

Post-Brexit, a trade and cooperation agreement was reached between the EU and the UK, which has responded to challenges like these by giving batteries and electric vehicles some grace period before full rules and tariffs come into effect. However, in the following years, increasingly strict rules will be applied, next year 45 percent, and then 65 percent from 2027, depending on the value, will have to be applied to electric vehicle parts from the European Union or Great Britain, in from In order to avoid customs duties.

Since Stellantis plans to manufacture the batteries in China and Europe in the coming years, it will have to count on higher logistical costs due to the British action, which, according to the company, will threaten the sustainability of British production activities. They also added that the UK does not have the raw materials needed to produce batteries.

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Stellants called on the British government to reach an agreement with the European Union on maintaining the current rules until 2027.

Cover photo: Cyril Marcilhacy/Bloomberg via Getty Images

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