Business Minister Jonathan Reynolds said he had done “everything possible” to prevent the planned closure of Vauxhall’s Luton-manufacturing plant, where 1,100 jobs are at risk.
The shutdown was due to the government’s plan to force automakers to build more electric cars, fining them $15,000 per car if they miss their target. The government will review these laws, said Mr. Reynolds.
The hit comes after a similar period of car manufacturing in the UK. Last year, a number of investments were announced, which seemed to arrest the decline of the industry and even provide opportunities for growth.
Carmakers including Aston Martin, Jaguar Land Rover (JLR), Mini and Nissan have announced plans to build battery plants or sign deals to acquire the technology to build fleets of new electric vehicles.
It wasn’t all good news. Britain’s new battery manufacturer Britishvolt joined last January, taking over the UK’s only independent solar power plant.
But it comes as JLR’s decision to open a £4bn battery has saved jobs in the industry after years of decline, with recent losses including the Honda factory in Swindon, which is set to close in 2021 after 36 years with the loss of 3,500 jobs.
But now, the threat of factory closures has returned after Vauxhall owner Stellantis said his Luton van plant is facing the axe.
Stellantis, the owner of the plant, said last month that it would review its operations in the UK based on tougher regulations on electric vehicles. It plans to merge its operations with its plant in Ellesmere Port, which has already been converted to electric vans.
Vauxhall owner Stellantis is not the only company suffering the downturn. Volkswagen said on Tuesday it plans to close a factory in China as sales there slow for the company. European car sales, after a setback following the pandemic, are struggling, especially in electric vehicles.
It’s not that EV sales aren’t rising – they’re not rising fast enough to justify the billions of pounds being spent on changing production lines and supply chains to create new, more powerful batteries, and bottom lines are being hit.
Automakers say the goal of about one-fifth of cars being electric is double the car adoption rate today. In order for the public to buy them, they are having to lower prices.
But Britain’s electric giants are not to blame for Luton’s planned closure or the industry’s wider problems, said Andy Palmer, the former head of Aston Martin, as well as the boss of Nissan.