May 28, 2023

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A major car manufacturer is threatening to shut down factories if the British government does not review its Brexit deal

A major car manufacturer is threatening to shut down factories if the British government does not review its Brexit deal

Employees at the Stellantis gearbox factory in Metz.AFP photo

From next year, 45 percent of the value of an electric vehicle must be of British or European origin to be exported to the mainland duty-free, as set by the EU. In 2027, that percentage will increase to 65 percent. If the vehicle does not meet this requirement, a 10 percent rate will be charged. This can cause problems for the British because not enough batteries are made in their country, so they have to import them, usually from outside the EU. Batteries are the most expensive part of an electric vehicle.

Stellantis hopes London and Brussels will agree to postpone the planned increase for next year. After all, a lot has changed since the conclusion of the Brexit deal, such as high inflation and anti-Corona lockdowns. British Economy Minister Kimi Badnoch promised to do her best. According to the minister, the postponement would be beneficial for both parties, the UK and the EU. Stellantis has been investing in electric vehicles in the UK for two years.

Meanwhile, the UK government needs to speed up battery production, says Stellantis. “If the cost of manufacturing electric cars in the UK becomes unprofitable, the factories will close,” the company said. “Manufacturers will no longer invest and move, as we saw with Ford and Mini.” Data released by the Association of Motor Manufacturers and Traders this year showed that only 775,014 cars will be manufactured on British soil in 2022, the lowest number since 1956. Britain’s exit from the European Union and the Corona closure are seen as the main reasons.

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British Vault

British battery production took a hit early this year when Britishvolt went bankrupt, ending the dream of a giant battery factory in the north-east of the country. The Envision AESC battery plant is now being built in the same area, near the Nissan plant.

Compared to other countries, the British government appears to be less active in supporting the industry. Recently, Tesla owner Elon Musk was a guest of French President Emmanuel Macron. Musk may build a large battery factory in France. Meanwhile, the Spanish government is trying to convince Jaguar Land Rover, the largest British automaker, to set up such a plant on Spanish soil.