The owner of Vauxhall has warned it may close UK factories unless the Government renegotiates its Brexit deal.
Stellantis highlighted how it could face a 10% tariff on exports to the EU because of rules on where parts are sourced.
“If the cost of electric vehicle manufacturing in the UK becomes uncompetitive and unsustainable, operations will close,” the company said.
The threat risks throwing the future of its Vauxhall plant in Ellesmere Port into doubt.
Electric vans made at the Cheshire site face the extra tariff because they will not contain enough locally sourced parts.
Rules state that 45% of the value of an electric vehicle must come from the UK or EU from 2024.
Stellantis, which also owns Citroen, Peugeot and Fiat and employs more than 5,000 people in the UK, told a Commons inquiry that its UK investments were in the balance due to the terms of the Brexit trade deal.
Its concerns echo wider industry concerns.
Mike Hawes, chief executive at the Society of Motor Manufacturers and Traders, said extra tariffs also risked making electric cars even more expensive.
“At a time when every country is accelerating their transition to zero emission transport, and global competitors are offering billions to attract investment in their industries, a pragmatic solution must be found quickly,” he said.
The situation has been made by false starts to plans to site gigafactories in the UK that can build batteries for electric vehicles.
Meanwhile, an economics academic has warned there is an “existential threat to the UK car industry”.
Professor David Bailey, professor of business economics at the Birmingham Business School, BBC ’s Today programme that increased tariffs and stricter rules in post Brexit trading agreements will put British manufacturers at a competitive disadvantage.
Prof Bailey said: “I think there is a kind of existential threat to the UK car industry.
“The rules in the Brexit agreement don’t help the UK car industry either.
“If they can’t meet those rules, they’ll face a 10% tariff on cars made in the UK and exported to the EU and vice versa.
“That will put the UK at a competitive disadvantage.”
Jonathan Reynolds, Shadow Business Secretary, said: “These are issues that ministers should have seen coming and been proactive in addressing - instead we have a government in chaos.
“This is an indictment of a government that has both failed to make Brexit work for businesses and is unable to harness the opportunities of the green transition.”
The PM’s spokesman said: “We hope to be able to come to a resolution be on this
“It’s important to note that it affects both cars moving from the EU to the UK as well as the other way.”
