Vauxhall owner threatens factory closures unless UK renegotiates Brexit deal

One of the world’s largest car manufacturers has urged the Government to renegotiate its Brexit deal with the EU or said it may have to close factories in Britain.

Stellantis – which makes Vauxhall, Peugeot, Citroen and Fiat – said present arrangements with the EU pose 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, seen by the BBC, the carmaker said its UK investments were under threat as a result of the strict terms of the post-Brexit free trade deal.

These so-called local content rules state that from next year, 45pc of the value of the electric car should originate in the UK or EU to qualify for trade without tariffs, which would be set at 10pc.

It had committed to making electric vehicles at its Ellesmere Port and Luton plants two years ago, which employ about 2,000 workers combined.

However, it warned: “If the cost of EV manufacturing in the UK becomes uncompetitive and unsustainable, operations will close.”

A Government spokesman said that Business and Trade Secretary Kemi Badenoch “has raised this with the EU”.

Andy Palmer, a former chief operating officer at Nissan, told BBC Radio 4’s Today programme that it is “impossible to meet local content rules unless you source your battery within the UK or EU” but the “supply chain at the moment isn’t there” in Britain.

He said the battery alone represents 40pc of the value of an electric car, adding: “We have been sleeping at the wheel when it comes to bringing battery plants to the UK.”

He said: “The cost of failure is very clear. It is 800,000 jobs in the UK, which is those jobs associated with the car industry.

“If you can’t meet these local content rules, if you don’t have a battery capability in the UK, then those car manufacturers will move to mainland Europe.”