Jeremy Hunt insisted the government is “very focussed” on ensuring Britain improves its EV car manufacturing capacity, after Vauxhall and Fiat’s parent firm warned of Brexit-linked concerns.
The Chancellor’s comments were made in the wake of worrying remarks by automaker Stellantis, saying the future post-Brexit tariffs could threaten sections of its UK business, placing hundreds – if not thousands – of jobs at risk.
Stellantis – the parent company of Vauxhall, Citroen, Peugeot and Fiat – which employs more than 5,000 people in the UK – told a Commons inquiry into supply of batteries for EV manufacture that their UK investments were in the balance due to the terms of the trade deal.
Responding to questions at the British Chamber of Commerce (BCC)’s annual conference, Hunt said, “as we move to EVs we need to have battery making capacity in the UK.”
He added: “We have the ability under the post-brexit trading arrangements to import EV batteries from other EU countries, but the reality is there is a supply shortage… so we need to have that supply here in the UK.”
His comments follow the warning shots from automotive conglomerate Stellantis this morning, that without a renegotiation of current Brexit trade arrangements, the company risks losing sections of its business, placing hundreds of jobs at risk.
In a letter to the government, Stellantis said that current EU rules which come into force next year, say that manufacturers must source 45 per cent of the value of electric car parts from the UK or EU, otherwise their vehicles will be subject to a 10 per cent tariff.
But supply chain issues and poor UK manufacturing facilities mean automakers are struggling to source those EV parts from the EU.
Hunt said that “the closer [the supply] is located to the factories that are making the rest of the car, the better.”
“All I would say is watch this space, because we are very focussed on making sure the UK gets that EV manufacturing capacity.”
Stellantis’ announcement marks the first time a car company has called on the government to renegotiate elements of the Brexit trade deal.
Stellantis will meet with Business Secretary Kemi Badenoch later today to discuss the issues.
The world’s fourth biggest car maker committed to making electric vehicles at its Ellesmere Port and Luton plants two years ago. But in a submission to the inquiry, the company said the Brexit deal was a “threat to our export business and the sustainability of our UK manufacturing operations”.
Following the comments, Labour leader Sir Keir Starmer said the Brexit deal needed to be improved after the owner of Vauxhall said it will be unable to keep its commitment to make electric vehicles in the UK without changes to the trade agreement with the European Union.
Speaking to BBC Breakfast, the Labour Party leader said: “Look, we’re not going to re-enter the EU. We do need to improve that deal. Of course we want a closer trading relationship, we absolutely do. We want to ensure that Vauxhall and many others not just survive in this country but thrive.”