Business Minister Jonathan Reynolds has said it did “everything possible” to prevent the planned closure of Vauxhall’s Luton van plant, where 1,100 jobs are at risk.
The government was blamed for the shutdown.The plan is to force carmakers to build more electric vehicles, with fines of £15,000 per car if they miss their targets. Mr Reynolds said the Government would review these laws.
The setback comes after relatively encouraging. Time to build a car in Britain. Last year, a number of investments were announced, which appear to prevent the slow decline of the industry and even provide opportunities for growth.
Carmakers including Aston Martin, Jaguar Land Rover, Mini and Nissan have either announced plans to build battery plants or signed deals to acquire technology to develop new fleets of electric vehicles.
It wasn’t all good news, however, when new UK battery maker British Volt went under last January, along with the UK’s only independent electric power plant developer.
But deals such as JLR’s decision to open a £4bn battery plant have secured jobs after years of shrinking in the industry, with recent losses including the Honda factory in Swindon, which is set to lose 3,500 jobs by 2021 after 36 years. I closed.
But now, the threat of factory closures has returned after Vauxhall owner Stellantis said its Luton van plant is facing the axe.
The plant’s owner, Stellantis, said months ago that it would review its UK operations in light of tougher rules for electric cars. It plans to merge its operations with its plant in Ellesmere Port, which has already been converted to making electric vans.
Vauxhall owner Stellantis is not the only company suffering from the slowdown. Volkswagen said on Tuesday it plans to close a factory in China because the company’s sales there are sluggish. European car sales, after bouncing back after the pandemic, are also struggling, particularly in electric vehicles.
Sales of electric vehicles are increasing.
It’s not that EV sales aren’t growing – they’re just not growing fast enough to justify the billions of pounds being spent on replacing production lines and supply chains with battery-powered ones. New models, and bottom lines are affected.
Carmakers say the goal of about a fifth of cars being electric is double the natural take-up of vehicles today. In order for the public to buy them, they are having to cut prices.
But Britain’s electric car-making targets are not solely to blame for Luton’s planned closures or wider industry woes, said Andy Palmer, chief executive of Aston Martin as well as a top boss at Nissan.
“It’s not the whole story,” he said, as high energy prices, jittery consumers after years of high inflation and a Trump presidency weigh heavily on making green cars.
‘Needs some flexibility’
“There’s an acceptance that the rules need some flexibility,” he says, but in many ways the ZEV mandate, as it’s called, has worked.
This has forced manufacturers to build more electric cars. Prices have come down which is good for consumers.
“Of course, they hate it, and they’re going to do everything in their power to lobby against it, to buy themselves some time. And that’s really, I think, what you’re seeing. , was played before the public.
He added that this lobbying has been going on for some time. He was part of the industry when it lobbied against the introduction of Euro 1 regulations, which came out in the early 1990s and required catalytic converters to be installed to reduce emissions of harmful nitrogen-base gases. go
“The industry eventually swallows it and then proceeds with cost cutting,” he adds. Cheaper cars will ultimately lead to faster adoption.
Brexit ‘part of the problem’
Andrew Graves at the University of Bath, a 50-year veteran of the UK car industry, said the other long-running issue was Brexit.
Leaving the EU added extra costs and red tape to the import and export of cars and made things difficult for multinational owners of British car plants such as Stellenbosch, Tata, owner of Nissan and JLR.
“If you’re not in the EU, you’re at a big disadvantage,” he said. Donald Trump’s presidency and his increased tariffs are also likely to affect the UK car industry – one of the UK’s biggest exporters.
Mr Graves added: “Of course, for us, being a small island outside the EU, we are really vulnerable to revenue, because we have little or no economic power of our own, when Unless we’re part of Europe, there are some dangerous days ahead, I’m afraid.”