Stellantis to make 'correction' to UK business to boost profits

Stellantis will make a “correction” to its UK business in the coming weeks in response to the damage the government’s zero-emissions vehicle (ZEV) mandate has done to profitability.

Company CEO Carlos Tavares told Autocar at the Paris motor show that the exact response was being decided this week.

"I will be very specific very soon," he said. When asked for a timeframe, he said: "In the next few weeks."

Tavares has been heavily critical of the mandate, which requires car makers to have a 22% share of EV sales this year or face a £15,000 fine per vehicle that doesn't comply.

"I think that it's very dangerous for a country to have a mandate that is ahead of what the consumer wants," said Tavares.

"You have it in the UK with the ZEV mandate. You will have it next year in Europe. We will have to adjust a number of things in the UK."

Tavares said his UK business was on track to meet the demands of the mandate but this "has an impact on our profitability. And as a consequence, I need to restore the profitability by a certain number of decisions in terms of making things more efficient in the UK."

Tavares is also unhappy with the fact the mandate has not been backed by incentives from the government to help stimulate demand that isn't there from buyers.

"If you put your ZEV mandate ahead of the consumer demand, you need to give money to the consumer for the consumer to accept it," said Tavares.

"We are not asking the money for ourselves. We are saying: give the money to the consumer."

Tavares's latest comments come after his April warning that the ZEV mandate would "kill" the UK's automotive industry. He estimated that demand for battery-electric cars was "half of the mandate" and urged that "time [was] ticking" for the government to soften the legislation.

In June, Stellantis UK boss Maria Grazia Davino warned that the company could stop building cars here if the government's electrification initiatives created a "hostile" trading environment.

"Stellantis UK does not stop," said Davino, but "Stellantis production in the UK could stop."

The company currently builds small and mid-sized vans and MPVs at its factories in Ellesmere Port and Luton.

Davino added: "If demand does not follow the offer, then we will be forced to take decisions because we manage profit and loss; we manage operational decisions that are impacting the UK.

"I can't answer the question about 'when', because we don't plan this. It's not what we want to do, and we will fight for our production in the UK.

"But you have to have advantages to build in a country."

Tavares followed Davino's comments by ordering a review of Stellantis's UK factories – with a view to possibly shutting them down for good.

“The ZEV mandate is hurting significantly our business model and this is triggering a strategic review of our business model, including the manufacturing footprint,” said Tavares.

“We cannot be making these [vehicles] in the UK and being the victims of the ZEV mandate. This is a contradiction that the company cannot accept.”