Vauxhall owner was ‘confident’ about meeting EV rules before factory shutdown | Stellantis

The owner of Vauxhall told investors that it was “confident” it would meet the UK’s rules on electric vehicle sales just two months before it blamed them for the decision to close a factory in Luton, the Guardian can reveal.

Stellantis cited the UK’s zero-emission vehicle (ZEV) mandate when it announced the closure of its van factory in Bedfordshire on Tuesday, putting 1,100 workers at risk of redundancy or relocation to its factory making smaller vans in Ellesmere Port.

However, Natalie Knight, Stellantis’s chief financial officer, told a conference in September that the business expected to make a profit from its British sales and to meet the ZEV targets, avoiding steep fines.

The comments appear to undermine Stellantis’s repeated claims that the factory, which makes the Vivaro van, was threatened by the mandate.

Carmakers have launched a months-long lobbying effort to persuade the UK government to relax the mandate, which aims to spur the shift away from polluting petrol and diesel vehicles towards cleaner battery cars and vans. Those efforts culminated on Tuesday night, when the business secretary, Jonathan Reynolds, told a dinner for 1,000 car industry executives that the government would “fast-track” changes.

Stellantis’s decision to make its closure announcement on Tuesday afternoon was widely seen as a deliberate snub to the government.

The global carmaker, which is headquartered in the Netherlands, has repeatedly criticised the ZEV mandate. Chief executive Carlos Tavares in April said it would “kill” the UK industry, while the former head of the UK operations warned in June of potential closures linked to the mandate and the lack of subsidies for EVs.

Knight’s comments to investors at the conference earlier this year, hosted by Bank of America, painted a different picture of the situation in the UK. According to a transcript held by data company Alphasense, she said that while other companies had challenges because they sold too few electric cars, Stellantis had a “pretty nice mix” of electric and petrol, meaning it would avoid fines.

The UK “was a spot where we’re confident we’re going to be able to hit ZEV mandate by the end of the year”, she said. “We’re confident that we’re going to do it at reasonable profitability.”

Under the rules, carmakers must meet a 22% target for electric car sales in 2024, rising to 28% in 2025, and 80% in 2030. For van sales the targets are 10% in 2024, 16% next year, and 70% in 2030. However, crucially, the rules contain various loopholes that allow carmakers to win credits by “over-complying” in later years, as well as cutting the average emissions of their remaining petrol and diesel cars.

The attempt to blame the ZEV mandate for the Luton closure puzzled some in the car industry. While several carmakers have complained bitterly about the mandate, it applies to all sales, including imports from other countries. Most of the UK’s cars and vans – including the majority of Luton’s output – are exported, meaning they have no impact on the UK’s ZEV mandate.

Several senior executives at rival carmakers this week said they believed there was no direct link between the ZEV mandate and Stellantis’s decision, although some argued that the mandate indirectly undermines the case for investment in British factories.

Quentin Wilson, who founded FairCharge, a pro-electric car group, said the loss of jobs at Luton was “terribly sad”, but that it was more likely to be related to Stellantis’s overcapacity.

“It’s a way of leveraging government, to say if you don’t roll back these targets, this is what’s going to happen,” he said.

A spokesperson for Stellantis said the natural demand for electric cars is “half that of this year’s mandate”, and that it was “not correct” to blame overcapacity in van production.

Reynolds on Wednesday told parliament that he wastold about the closure plan 10 days after the UK’s general election in July. He said it “was a dark day for Luton”, and blamed the previous Conservative government, despite Labour adopting the ZEV mandate from its predecessor.

Reynolds said that “despite our best efforts, we have been forced to accept that this is ultimately a commercial decision by Stellantis as they respond to wider challenges within the sector”.

Other carmakers have welcomed the government’s decision to relax the mandate, with a consultation announced on Tuesday.

Lisa Brankin, chair and managing director of Ford UK, told BBC Radio that she welcomed the government’s commitment to change the ZEV mandate. Ford is cutting 4,000 jobs across Europe, including 800 in the UK.

She said “it’s just that there isn’t customer demand” to meet the mandate as it is.

However, charger companies, fleet owners and environmental campaigners have objected. Fiona Howarth, chief executive of Octopus Electric Vehicles, which leases cars, said: “Changing the mandate would mean shooting ourselves in the foot by bowing to the pressure of a few laggard companies.”