London Daily

Focus on the big picture.
Saturday, Aug 01, 2026

Vauxhall-maker says UK needs to change its Brexit deal

Vauxhall-maker says UK needs to change its Brexit deal

One of the world's biggest carmakers has called on the government to renegotiate part of the Brexit deal or risk losing parts of its car industry.

Stellantis, which makes Vauxhall, Peugeot, Citroen and Fiat had committed to making electric vehicles in the UK.

But it has now said it is no longer able to meet Brexit trade rules on where parts are sourced.

The government is "determined" that the UK will remain competitive in car manufacturing, a spokesperson said.

Stellantis called on the government to come to an agreement with the EU to keep rules as they are until 2027.

It also wants arrangements for manufacturing parts in Serbia and Morocco to be reviewed.

Just two years ago, the world's fourth biggest car maker said the future of its Ellesmere Port and Luton plants were secure.

But now Stellantis has asked the UK government to renegotiate part of the Brexit deal amid a "threat to our export business and the sustainability of our UK manufacturing operations".

In a submission to a Commons inquiry into electric car production, the firm said its UK investments were based on meeting the strict terms of the post-Brexit free trade deal.

These rules state that from next year, 45% of the value of the electric car should originate in the UK or EU to qualify for trade without tariffs.

Stellantis said it was "now unable to meet these rules of origin" after the surge in raw materials costs during the pandemic and energy crisis.

If the government cannot get an agreement to keep the current rules until 2027, from next year "trade between the UK and EU would be subject to 10% tariffs", it said.

This would make domestic production and exports uncompetitive in comparison to Japan and South Korea, it said.

"To reinforce the sustainability of our manufacturing plants in the UK, the UK must consider its trading arrangements with Europe," Stellantis said.

A government spokesperson said that Business and Trade Secretary Kemi Badenoch "has raised this with the EU".

Ms Badenoch "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," the spokesperson said.

The government has set up a fund to develop the supply chain for electric vehicles, and in the coming months will take "decisive action to ensure future investment in zero emission vehicle manufacturing", the spokesperson added.


'Uncompetitive'


The deal on electric cars and batteries was one of the very last issues settled in Brexit negotiations between Boris Johnson and Ursula von der Leyen in 2020.

The Stellantis document warns that uncompetitive electric vehicle costs will mean "manufacturers will not continue to invest" and will "relocate manufacturing operations outside of the UK".

It then lists Ford, and BMW's electric Mini, as well as Honda's investment in the US after closing its UK site in Swindon.

The core problem remains a lack of UK battery plants, and a domestic supply chain that should be being built now, but is being dwarfed by developments elsewhere.

At a time of some uncertainty over UK trading arrangements, now the US, China and the EU are pouring subsidies into this market.

The industry-wide fear is that the UK is missing out on a once-in-a-generation tidal wave of investment around the electrification of cars.


Gigafactory


Earlier this week, French President Emmanuel Macron hosted Tesla's Elon Musk, who hinted he might invest in a gigafactory in France.

The owners of the UK's biggest manufacturer, Jaguar Land Rover, are currently being wooed by the Spanish government to host a gigafactory that had long been assumed to be being built in the UK.

The Brexit trade agreement allowed a "phase in" of the strict rules on the origin for electric vehicle parts.

The first stage comes in next year, and some in the UK car industry hope that the EU itself may want to renegotiate, if its own manufacturers are struggling to meet the origin requirements.

But the requirements are hard-wired into the UK-EU treaty.

The rules are then due to tighten again in 2027, and insiders believe UK exporters will find it impossible to export cars tariff free at that point, without UK battery production.

Newsletter

Related Articles

0:00
0:00
Close
Finland Deploys Commercial-Scale Thermal Batteries Using Crushed Rock to Store Renewable Grid Energy
Valued at $109 Million: F-35B Fighter Jet Crashes in Southern California
Sainsbury Agrees to Sell Argos in £120 Million Deal to Private Consortium
High Court Clears Way for Construction of Chinese Embassy at Royal Mint Court
UK Fuel Prices Climb to Multi-Month Highs as Strait of Hormuz Tensions Disrupt Oil Supplies
Severe Summer Drought and Record Heat Put UK Harvests at Risk
Prime Minister Andy Burnham Faces Labour Backbench Opposition Over Potential Support for New North Sea Oil and Gas Drilling
Bank of England Warns Inflation Will Stay Above 3% as Middle East Energy Shock Prolongs Cost-of-Living Pressures
Andy Burnham has Announces Plans to Redistribute Income Tax Revenue to English Mayors
Early-Release Scheme Faces Fresh Scrutiny as Reoffending and Prison Recalls Rise
Police Phone Checks Followed Report on Murder of MI5 Agent Inside Sinn Féin
Archbishop of Canterbury Reaffirms £100 Million Reparative Justice Fund During Ghana Visit
Charities Allege French Police Used Tear Gas Against Channel Migrants
Norwegian Teenager Convicted Over Iran-Linked Murder Plot in Britain
Christian Organisations File Charity Complaints Against Amnesty International UK
Ofgem Tightens Grid Connection Rules for New Data Centres
FTSE 100 Reaches Record High Despite Global Technology Sell-Off
Millions of UK Households Urged to Check Eligibility for Winter Energy Discount
Labour Restores Parliamentary Whips to Diane Abbott and Joani Reid
UK Supreme Court to Hear Challenge Over Palestine Action Ban
UK Commits More Than £8.4 Billion to Dreadnought Nuclear Submarine Programme
England Declares Severe Drought as Wildfire Burns Near Sizewell Nuclear Site
Bank of England Holds Interest Rates at 3.75% as Middle East Tensions Fuel Inflation Risks
Drought Status Extended Across All of Wales as Heat and Dry Weather Deepen Environmental Strain
Record-Low Danube Exposes Probable Mammoth Remains in Bulgaria
UK Business Confidence Climbs to Four-Month High
Greater Manchester Gains Expanded Powers Under Regional Funding Reforms
UK Supreme Court to Hear Appeal Over Palestine Action Terror Ban
Shell's Quarterly Profit Doubles to Nearly $10 Billion on Higher Energy Prices
UK Government Removes VAT From Household Electricity Bills
Exceptional Drought Grips Half of England as Wildfire Threatens Sizewell
Bank of England Holds Interest Rates at 3.75% as Inflation Risks Persist
US Says It Has Carried Out Heavy Strikes on Iran After Attempted Attacks on Its Forces
The chief executive of the popular gaming company laid off many employees and his pay rose to 38 million dollars
UK Employment Holds Steady as Wage Growth Remains Moderate
England to Introduce Artificial Intelligence into Secondary School Curriculum
Wales Launches £1.2 Billion Industrial Regeneration Programme
High Court Upholds UK Digital Surveillance Framework
Northern Ireland Reaches Budget Agreement on Infrastructure and Public Sector Pay
Home Office Expands Digital Border Checks Nationwide
UK Approves Major North Sea Wind and Carbon Capture Project
The World's Most Terrifying Smartphone: Recording, Documenting, and Reporting to the Regime
Scotland Approves Major Renewable Energy Expansion
UK and United States Sign AI and Semiconductor Cooperation Pact
UK Treasury Tightens Fiscal Controls After Gilt Market Volatility
Bank of England Holds Interest Rates at 4.5%
UK Unveils £10 Billion NHS Funding Overhaul and Workforce Reform
The AI User Nightmare: Private Claude Conversations Leaked to the Internet
UK: Former Football Association Leaders Call for World Cup Boycott Over FIFA Privatization Plan
Forbidden Love: China severs millions from their virtual partners
×