Stellantis warns UK to change Brexit deal

STORY: The British government must renegotiate its Brexit deal, or else car factories will shut.

That was the warning from automaker Stellantis on Wednesday (May 17).

The owner of Vauxhall, Peugeot and other brands said Britain's current deal with the EU is too costly.

From next year, tougher post-Brexit rules come into force.

It means firms like Stellantis would face tariffs when exporting electric vans to Europe.

The car group wants Britain to extend the current rules on the sourcing of parts until 2027 instead.

A government spokesperson said the business secretary had raised the issue with the EU.

After Brexit, Britain's trade deal with the EU decreed 45% of the value of an EV must come from Britain or the EU from 2024 in order to avoid tariffs.

Stellantis had announced $126 million electric vehicle investment at a UK site in 2021.

It said when it made that announcement it believed it would be able to create enough parts in Britain or Europe to meet the rules.

But now it says it can't meet those Rules of Origin.

It blamed factors including the war in Ukraine, supply issues and raw material cost inflation.

The UK has also struggled to develop major battery factories for EVs.

A major British car trade group also warned Parliament about its deal.

The Society of Motor Manufacturers and Traders said the EU and Britain didn't have the manufacturing capability to meet requirements for batteries and battery parts.