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The UK government must do more to encourage drivers to switch to electric vehicles before Stellantis, owner of the Vauxhall brand, will commit to a full conversion of its Luton van factory to battery-powered models, one of the company’s top executives has warned.
The demands by the vehicle maker, which also owns Citroën, Fiat, Peugeot and Opel, come as it holds talks with ministers over financial support to convert the plant in Bedfordshire. Last week, Stellantis announced it would begin a “limited” first production run in the UK next year of its mid-size electric vans at Luton, where it currently makes diesel-powered vehicles.
But Uwe Hochgeschurtz, the company’s head of European operations, said the country’s biggest van maker would not commit the funds to convert Luton to an all-electric factory until the government had a concerted policy to encourage drivers to ditch combustion engine-powered vehicles.
“There must be clear advice: if you buy a [battery electric vehicle], it’s good. Then it makes sense to contribute to more BEV production in Britain,” he told the Financial Times. Stellantis, which makes small electric vans at its Ellesmere Port plant in north-west England, currently imports all mid-sized models for the UK market from France.
UK electric van sales rose by a fifth last year, however, overall EV demand fell, a trend industry executives blame partly on mixed messaging from Prime Minister Rishi Sunak after he decided to delay a ban on the sale of new combustion-engine cars until 2035.
Without mentioning the government’s decision to push back these curbs, Hochgeschurtz said that incentivising drivers to switch to all-electric vehicles came before any request by the company for financial assistance.
“Number one, you must make sure that there is demand,” he added, saying there would be no point investing “if we do something which is nice for the government, maybe nice for the short-term benefit, but nobody buys your products”.
Even though the government already offers discounts worth up to £5,000 to buy an electric van, industry executives said corporate buyers were still put off switching because battery-powered vehicles were significantly more expensive than their diesel counterparts.
Stellantis secured about £30mn of UK state support in 2021 as part of a £100mn investment to transform Ellesmere Port to EV production.
It is the biggest seller of electric vans in the UK through its Peugeot, Citroën, Vauxhall and Fiat brands, accounting for almost half the market last year.
A spokesperson for the transport department said a UK scheme that requires car and van makers to sell ever-higher numbers of electric models each year “provides certainty to the industry and consumers, supporting the transition to electric and safeguarding skilled jobs in the UK car industry”.
They added that grants and tax incentives over the past decade “have accelerated the uptake of electric vehicles with over 1mn now on UK roads”.
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