BEERG Newsletter - UK: 800,000 auto jobs at risk

The auto company Stellantis has called on the UK government to renegotiate part of the Brexit deal or risk losing parts of its automotive industry. The firm, which makes Vauxhall, Peugeot, Citroen, and Fiat cars, had committed to making electric vehicles in the UK but says it is no longer able to meet Brexit trade rules on where parts are sourced. 

It has urged ministers to come to an agreement with the EU to keep rules as they are until 2027, warning of a “threat to our export business and the sustainability of our UK manufacturing operations." Stellantis warned it may be forced to close its Ellesmere Port factory unless ministers manage to renegotiate the rule on locally sourced parts.

Jaguar Land Rover (JLR) has said much the same. So has Ford. At the heart of the dispute, say the car firms, is the trade and cooperation agreement (TCA) between London and Brussels. It was signed in 2020 and includes “rules of origin” that require 40% of an electric vehicle’s parts by value to originate in the UK or EU in order for it to qualify for trade without tariffs. Most batteries come from China, so it’s a struggle to satisfy the rules. When the threshold rises to 45% next year and 55% in 2027 it will be impossible, carmakers say.

For a fuller analysis, see here