Vauxhall's Plant Closure Threatens: A Struggle with Electromobility

The British Secretary of State for Business, Jonathan Reynolds, emphasized that he had done everything possible to avert the impending closure of the Vauxhall plant in Luton, where 1,100 jobs are at risk. The background to this dramatic decision is the government policies that force car manufacturers to expand electric vehicle production. If the set targets are missed, fines of £15,000 per vehicle are threatened. Reynolds announced that the government intended to review these regulations. This challenge hits the British automotive industry after a year of recovery, during which numerous investments were announced to halt the steady decline of the industry and create growth opportunities. Among the car manufacturers that initiated major projects are renowned brands like Aston Martin, Jaguar Land Rover, Mini, and Nissan, which are either planning new battery plants or have formed partnerships to develop fleets of new electric vehicles. However, not only a positive trend is emerging. The decline of the emerging British battery manufacturer Britishvolt in January was a severe setback for the progress of independent power source development in the country. Nevertheless, investments like Jaguar Land Rover's £4 billion battery factory secured jobs and created new opportunities in a sector that had already shrunk significantly due to closures like the Honda plant in Swindon in 2021, with a loss of 3,500 jobs. Now the closure of the Vauxhall plant threatens the industry again. Vauxhall's owner, Stellantis, had already announced a few months ago that it was reviewing its operations in the UK due to the strict electric vehicle regulations. There are plans to consolidate activities with the Ellesmere Port plant, which has already been converted to produce electric vans. Not only Stellantis is struggling with a downturn. Volkswagen announced on Tuesday that it wants to close a plant in China due to declining sales figures. The European automotive market is also struggling after recovering from the pandemic, particularly with battery-electric models. Electric vehicles are seeing an increase in sales, but this is currently not enough to justify the significant investments in converting production lines and supply chains to the new models. The market share of about one-fifth that electric vehicles are supposed to achieve in the automotive market would currently be twice as high as actual demand. To be able to sell the vehicles, prices must be reduced. According to Andy Palmer, the former CEO of Aston Martin and previous top manager at Nissan, not only the British electric vehicle targets are responsible for the planned closure in Luton or the challenges of the industry.