In the absence of government action to modify the terms of its Brexit trade deal with the European Union, the fourth-largest automaker in the world by sales has warned of a potentially existential threat to significant portions of the British auto sector.
The parent company of Citroen, Fiat, Peugeot, and Vauxhall said it may not be able to keep its commitment to manufacturing its new fleet of cars in the U.K. without changes to the terms of the agreement in a submission to a parliamentary inquiry into the supply of batteries for electric vehicles on Wednesday.
The deal, according to Stellantis, posed a “threat” to its export business and the “sustainability” of its manufacturing operations. The corporation, which has over 5,000 employees in the UK, pledged two years ago to produce electric vehicles there.
The stern warning is likely to increase pressure on the Conservative government to seek modifications to the trade agreement that went into effect when the U.K. formally left the EU’s economic frameworks, including the seamless single market and customs union, at the beginning of 2021. On Wednesday, Stellantis executives are scheduled to meet with Kemi Badenoch, the British business secretary.
Even while the trade agreement guaranteed that no tariffs would be applied to goods exported from the U.K. to the EU, a variety of frequently intricate non-tariff obstacles has made it more challenging and frequently more expensive for British businesses to sell their products in the 27-nation union. Some of these restrictions are gradually being implemented.
Stellantis stated that it wanted the present phase-in time for the requirement to be prolonged until 2027, which would necessitate changing the trade agreement.
The company claimed that a heavy 10% duty on British-manufactured vehicles sold to the EU made them uncompetitive versus imports from other significant car-producing nations like Japan and South Korea.
Stellantis stated in its statement that the U.K. “must evaluate its trading agreements with Europe to enhance the sustainability of our manufacturing units in the U.K. “By establishing battery production in the U.K., we need to strengthen the competitiveness of the U.K.”
Keir Starmer, the leader of the largest opposition party, said the post-Brexit trade agreement needed reform but emphasized he wasn’t urging the U.K. to re-join the EU or its frictionless economic practices.
“That doesn’t imply going back on our choice to leave the EU, but the deal we have was declared to be oven-ready. He told the BBC, “It wasn’t even half-baked.
In a referendum held in 2016, the U.K. narrowly decided to exit the EU. By early 2025, there must be a general election, and surveys indicate that Labor will likely win with the most votes.
