The UK automotive industry faces a fresh upheaval as Stellantis, owner of Vauxhall, announced plans to close its historic van manufacturing plant in Luton.
This decision puts approximately 1,100 jobs at riks. It underscores the mounting challenges of transitioning to electric vehicles (EVs) under the UK’s stringent zero-emission mandates.
Luton Plant Closure: The Details
The Luton factory has been operational since 1905. It was set to begin producing Vauxhall’s Vivaro electric van by 2025.
Instead, Stellantis will consolidate its EV production at the Ellesmere Port facility in Cheshire, which will receive a £50 million investment boost.
The move is expected to enhance production efficiency but has drawn sharp criticism from union leaders and local stakeholders.
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a Unite spokesperson said:
“The proposal that has been tabled today has been a complete slap in face for our members in Luton, where Vauxhall vehicles have been manufactured for 120 years. Whatever the positive benefits this plan may have for Ellesmere Port, that is not acceptable.
“We stand ready to support our members in doing whatever we can to ensure that historical vehicle manufacturing is maintained in Luton and we call on the government to do the same.”
While Stellantis plans to create hundreds of permanent roles at Ellesmere Port and offer relocation assistance to Luton employees, union representatives argue this does not adequately address the community’s economic and social impact.
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Government’s EV Mandate Under Fire
Stellantis pointed to the UK’s zero-emission vehicle (ZEV) mandate as a key factor in the decision.
Under current rules, carmakers must ensure EVs constitute 22 percent of car sales and 10 percent of van sales by 2024.
Failure to meet these quotas could result in fines of £15,000 per non-compliant vehicle.
Business Secretary Jonathan Reynolds responded to the Luton closure by announcing plans to review the ZEV mandate, acknowledging industry concerns that the policy may be “not working as intended.”
However, he reiterated the government’s commitment to banning new petrol and diesel vehicle sales by 2030.
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A Broader Industry Struggle
Stellantis’ decision reflects broader anxiety within the UK automotive sector over EV adoption.
Industry leaders, including Nissan and Ford, have flagged weak consumer demand, high interest rates, and soaring raw material costs as barriers to achieving EV sales targets.
Last week, Ford announced 800 job cuts in the UK, citing similar concerns.
The Society of Motor Manufacturers and Traders (SMMT) warned that fulfilling the ZEV mandate could cost automakers £6 billion in 2024 alone, with potentially devastating consequences for jobs and investment.
SMMT’s chief executive, Mike Hawes, called for “workable regulation” backed by robust incentives to encourage EV uptake.
The Road Ahead
Despite recent growth in EV sales—nearly 25 percent of new car registrations in October—experts attribute this increase to unsustainable discounting rather than organic demand.
Manufacturers are calling for expanded government support to make EVs more affordable for consumers.
Stellantis’ announcement has reignited debate over the balance between environmental goals and economic viability.
While Ellesmere Port’s transformation into a dedicated EV hub is a beacon of progress, the closure of Luton’s plant marks the end of an era and raises questions about the future of UK automotive manufacturing.
As consultations on the ZEV mandate progress, industry leaders, unions, and policymakers must grapple with the challenge of safeguarding jobs while accelerating the transition to zero-emission vehicles.
The stakes are high—not just for Vauxhall in Luton but for the broader vision of a sustainable and competitive UK car industry.
