Stellantis CEO Carlos Tavares says the UK's EV mandate will force manufacturers to sell cars at a loss. Credit : Massimo Pinca/Reuters
A new crackdown on internal combustion engines could force manufacturer Vauxhall toreduce its presence in the UK, its boss has warned.
Carlos Tavares, chief executive of Stellantis, said that the law to restrict the sale of petrol cars is “terrible for the UK” and will force manufacturers to sell cars at a loss.
Unless ministers make urgent changes to the rules, he suggested Stellantis could be required to cut the number of cars it sells in the UK and refused to rule out the possibility of stopping sales of some models entirely.
A source close to the company said the more likely option would be to limit sales or for the company to be forced to raise prices to compensate.
When asked whether the Vauxhall and Citroën car maker could stop selling models in the UK, he replied: “I'm not going to sell cars at a loss.”
Mr Tavares blamed the drop in demand for electric vehicles, which were «collapsing in the real world» due to high prices, poor charging infrastructure and consumer range anxiety.
Electric vehicles' «natural» market share was currently only half of what car companies are required to sell under rules that took effect this year, he added.
Mr Tavares warned that the government's mandate for zero-emission vehicles (ZEVs) would force carmakers to cut prices to unprofitable levels. levels to meet targets and avoid punitive fines.
The CEO's remarks represent the biggest intervention yet by a major carmaker, as others have also recently warned that regulations in the UK and Europe are moving faster than demand.
< p>Sales of battery-electric models accounted for about 15.5% of total vehicle registrations in the first three months of 2024, roughly the same share as a year ago, according to the Society of Motor Manufacturers and Traders (SMMT).
But under the UK's ZEV mandate, which came into force in January, at least 22% of cars sold by manufacturers must be electric.
This target is gradually increasing to 80% by 2030 with a complete ban on sales of new petrol cars to be introduced from 2035.
But Mr Tavares said the rules were «terrible for the UK», saying he had urged Mark Harper, the transport secretary, to make changes at a meeting on Wednesday.
In a briefing with reporters on Thursday, he added: “It's very simple. The ZEV mandate [forces] carmakers to increase sales of electric vehicles every year.
“The problem is that today's UK market's natural demand for electric vehicles is half the mandate.
«If your mandate imposes on you a BEV [battery electric vehicle] sales rate that is twice the natural market demand, and if the ZEV mandate puts me in a corner saying, 'If you don't meet this, I'll kill you with fines,'» As a result, everyone will start pushing BEV, which will then completely destroy profitability.
«You don't expect Stellantis to support the red ink business.»
He called on the government to ease pressure on car makers by merging their incentives for cars and light vans, and allowing manufacturers to list the vehicles they make. for export to achieve their domestic goals.
Mr Tavares also warned that forcing carmakers to resell electric vehicles would make European automakers more vulnerable to the threat from cheap Chinese electric vehicle models.
However, he said Stellantis opposed punitive tariffs on Chinese manufacturers, adding that the company was already «struggling everywhere» for market share and that «protectionism» would ultimately lead to higher prices that would hurt consumers.
< p>He said the focus should be on lowering the cost of electric vehicles for the middle class, adding: «Selling electric cars only to the rich won't fix global warming.»
But Mr Tavares said he was not calling on ministers to reintroduce the electric car grants, which were scrapped in 2022, adding: “I'm not asking for incentives. I could. But it [means] more taxes for UK citizens — I don't think we need more taxes.»
He said: «What I'm saying is, why don't we try to be offensive instead.» defend against the Chinese, who are clearly demonstrating some additional competitiveness?
“Why don't we try to speed up and use the brains of our people to move faster on accessibility, technology and manufacturing?”
This comes after The Telegraph reported that three-quarters of new electric vehicles listed on Auto Trader were advertised at a discount, a sign that manufacturers and dealers are already being forced to cut prices.
The government has previously pushed for this. that the ZEV mandate will protect jobs in British industry and is «specifically designed to support existing manufacturers by providing them with flexibility to enable them to achieve their targets over time.»
The Department for Transport has been contacted for comment.
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