By Cristina Gallardo

Stellantis, owner of Vauxhall cars, said it would be forced to shut down its U.K. factories at Ellesmere Port and Luton unless the country's government relaxed targets for electric vehicle sales.

The U.K. requires that 22% of cars sold be electric from this year, but that percentage is set to rise to 80% by 2030. In 2035, the government is set to ban the sale of new petrol and diesel cars.

Stellantis's U.K. managing director, Maria Grazia Davino, said at a press conference in London on Tuesday that the rules didn't match consumer demand and could make sales unprofitable. Fully electric cars only accounted for 16% of sales in the U.K. this year to May, according to data from industry association the Society of Motor Manufacturers and Traders.

"We have undertaken big investments in Ellesmere Port and in Luton, with more to come," Davino said. "But if this market becomes hostile to us, we will enter an evaluation for producing elsewhere."

Stellantis--which also owns Peugeot, Fiat and Jeep--makes electric vans at those two U.K. plants, and employs more than 1,000 workers across both. The group will wait less than a year for a decision from the U.K. government, Davino added.

Her comments follow remarks Tuesday by Stellantis Chief Executive Carlos Tavares, who said that the group would need to reduce sales of petrol cars in the U.K. to meet the net zero target, or increase prices to compensate.

"To survive, companies have to stay in the black," he said. "I will not sell cars at a loss."

Write to Cristina Gallardo at

(END) Dow Jones Newswires

06-25-24 0950ET