Dutch automotive manufacturer Stellantis (Hoofdorp; www.stellantis.com) says it is having to consider shuttering its car manufacturing operations in the UK.

According to the company, the UK does not have a sufficient supply of critical materials to support vehicle battery production for electric vehicles (EV). Unless the Rules of Origin measures under the UK-EU Trade and Cooperation Agreement (TCA) – part of the Brexit deal – are renegotiated, the Dutch company says it will be left with no choice.

Stellantis submitted the remarks to a British House of Commons committee that set up an inquiry into the supply of batteries for electric vehicle manufacture in the UK. Under the current TCA agreement products that move between the UK and EU nations secure zero tariffs, but the UK government is phasing in increased trade restrictions and border control measures, from 2024 onward.

The upcoming changes to the TCA require that 45% of parts or 45% of the value of an electric vehicle must be worked on or processed within the UK or the EU to avoid a 10% tariff. “Our request to [UK] government with the EU is to maintain the current Rules of Origin until 2027,” Stellantis told the UK parliament.

Related: EU car registration growth continues / Battery electric vehicles sales soar

In a statement it added that it had planned on meeting the Regional Value Content of the vehicles at 45% to avoid import duties on trade flows between the EU and UK. However, due to various external headwinds, it is now unable to meet the Rules of Origin. Stricter rules are expected to create significant challenges to bilateral trade of electric vehicles and batteries and with unachievable Regional Value Content Targets. “If the cost of EV manufacturing in the UK becomes uncompetitive and unsustainable operations will close,” Stellantis said.

The group cited car makers such as Ford, which no longer manufactures its light commercial vehicles in the UK, and the BMW group, which announced the relocation of its production of electric mini vehicles from the UK to China. The company also mentioned Honda’s recent investment in EV production in the US.

Stellantis, said to be the fourth-largest automaker globally, has plans to redevelop two vehicle manufacturing sites in the UK. The Ellesmere Port plant is currently being redeveloped to build small electric vans, with deliveries of electric versions of the Opel Combo, Vauxhall Combo, Peugeot Partner and Citroën Berlingo models scheduled for production in H1 2023. The Ellesmore site will be the group’s first solus electric vehicle production plant. Stellantis’ Luton IBC vehicle production facility is also part of the company’s electrification roadmap for its brands.

Stellantis owns Vauxhall, Peugeot, Citroën, Fiat, DS, Jeep, Alfa Romeo, Maserati, Abarth, and Fiat Professional brands in the UK. It plans to offer fully electric Alfa Romeo and DS models in 2027, Vauxhall EVs by 2028, and Peugeot EVs by 2030.

According to the UK automotive trade association, Society of Motor Manufacturers and Traders (www.smmt.co.uk), the industry makes up 10% of the country’s GDP and is the UK’s largest exporter of goods, generating GBP 100 bn/y (EUR 116 bn) in global trade, with 78% of all exported finished vehicles shipped to the EU.