Stellantis NV (NYSE:STLA), the world's No. 3 carmaker by sales and owner of 14 brands including Vauxhall, Peugeot, Citroen and Fiat has warned the U.K. that British car plants will close with the loss of thousands of jobs unless the Brexit deal is swiftly renegotiated.
According to Stellantis, under the current deal it would face tariffs when exporting electric vans to Europe from next year, when tougher post-Brexit rules come into force.
The automaker wants the government and the European Union to extend current rules on the sourcing of parts until 2027 instead of a planned change in 2024 - a request that was echoed by the lobbying body for the European car trade.
"We hope to be able to come to a resolution with the EU on this," Prime Minister Rishi Sunak's spokesman told reporters on Wednesday.
Under the trade deal agreed when Britain left the bloc, 45% of the value of an EV being sold in the European Union must come from Britain or the EU from 2024 to avoid tariffs. However, a battery pack can account for up to half a new EV's cost. Batteries are also heavy and expensive to move long distances.
Auto manufacturers argue that in addition to revisiting tariffs, Britain must actively encourage greater battery production in order to ensure the long-term sustainability of its automotive industry.
British finance minister Jeremy Hunt hinted there would soon be a development on that front.
"Watch this space, because we are very focused on making sure that the U.K. gets EV and manufacturing capacity," he told an event on Wednesday.
Shares of STLA are up 1.52% in early trading on Wednesday.