A funding gap of just £40m risks scuppering attempts to ensure Stellantis’ Vauxhall factory at Ellesmere Port in Cheshire remains open.
The car giant has been mulling whether to reinvest in the plant, where it makes the Astra vehicle, due to the government’s decision to ban the sale of new petrol and diesel cars from 2030.
Executives have been in frequent talks with officials, including business secretary Kwasi Kwarteng, over plans to reinvest in the site.
The Telegraph reported that the government has offered Stellantis a portion of the £500m pot it has set aside to develop electric cars and their supply chains to keep the factory’s doors open.
A deal now hinges on a gap of around £40m between what the government has offered and what Stellantis wants to start developing EVs at the site, it was reported.
“Stellantis is saying, ‘it’s £Xm cheaper to do it elsewhere’ and want that gap closed. The difference is now less than £40m”, a source said.
The fate of the Ellesmere Port site has long been in doubt, with the current model of the Astra close to being retired.
Stellantis – the newly created firm formed by the merger of Peugeot owner PSA and Fiat Chrysler – has been clear that to keep the site open, the firm needs to build electric cars there.
Speaking at an event to mark the birth of the new firm in January, chief executive Chris Tavares said: “The biggest market is on the continental European side so if you look at it from a pure logistic perspective or from a paperwork perspective, perhaps it is better to put it in continental Europe”.
Since then, the fate of the 1,000 staff who run the plant has been up in the air, as well as the 6,000 other jobs supported by the factory’s supply chain.
Kwarteng has said that the government is “absolutely committed” to securing the future of the plant.
Stellantis declined to comment. City A.M. has contacted the Department for Business, Energy and Industrial Strategy for comment.