Before his departure from Stellantis, Carlos Tavares had reassured the French factories by announcing that there would be a plan for at least three years concerning them with, as a result, no immediate closure. This is unfortunately not the same case on the other side of the Channel, where Stellantis has just announced the closure of its historic Luton factory, specializing in the production of utility vehicles. This decision is part of a transition towards 100% electric production imposed by the British government by 2030, a measure which is already making waves in the automotive sector.
Carlos Tavares’ huge jackpot from Stellantis
An emblematic factory sacrificed
The Luton factory, active for decades, notably produced the Vauxhall (Opel) Vivaro, the Peugeot Expert, the Fiat Scudo and the Citroën Jumpy. However, it will have to cease its activities in the face of combined pressures, starting with the ZEV (Zero Emission Vehicles) mandate, which imposes increasing quotas for electric vehicles and which has notably contributed to making production costs unsustainable.
Inflation and rising energy prices also weigh heavily on the competitiveness of British sites compared to other locations in Europe. Stellantis had announced that production of these models would be transferred from 2025 to a modernized factory in Türkiye, managed in partnership with Koc Holdings. At the same time, and good news for French industry, the production of thermal engines will be relocated to Houdain, France.
A major social and economic impact?
The closure of Luton is accompanied by a refocusing of production in the United Kingdom on the Ellesmere Port site, recently converted to produce electric utility vehicles. This transformation, made possible thanks to an investment of 50 million pounds sterling (60 million euros), now allows the factory to manufacture models such as the Citroën ë-Berlingo, Peugeot e-Partner, Opel/Vauxhall Combo- e and Fiat e-Doblo.
At the same time, Stellantis is diversifying its electric production in Europe, with the launch planned for 2025 of a manufacturing line for the same electric utility vehicles in Mangualde, Portugal. Why Portugal? Not to echo the origins of the former Stellantis boss, but rather due to the significantly lower energy costs in the country. Coming back to the Luton factory, its closure directly threatens 1,100 jobs, although Stellantis has said it wants to transfer “several hundred” positions to Ellesmere Port.
The ZEV mandate: a subject of controversy
A little above, we told you about the ZEV mandate, but what is it in fact? Imposed by the British government, this mandate requires manufacturers to achieve a 22% share of electric vehicle sales for cars and 10% for utility vehicles by 2023. Severe fines (up to 17,000 euros per non-compliant vehicle) are imposed on companies that do not respect these quotas.
When he was still in office, Carlos Tavares expressed virulent criticism of this policy, believing that it is “disconnected from the reality of customer demand”. Car manufacturers, faced with objectives deemed unachievable, must resort to discount policies which erode their profit margins. Faced with pressure from the industry, the British government appears to be considering a review of quotas to adapt them to market reality.
