The Vauxhall Corsa is Stellantis’s best-seller in the UK
Europe boss Emanuele Cappellano says car makers are bleeding money in trying to hit EV targets
Vauxhall owner Stellantis has warned it may have to shrink sales operations in the UK because it can’t meet future government targets on electric cars without losing money.
“From a sales perspective, the regulation is forcing car makers to lose money,” Emanuele Cappellano, head of Stellantis in Europe, told Autocar. “The only ones who benefit are Chinese importers.”
The owner of brands including Peugeot, Citroën, Fiat and Alfa Romeo has recently committed to expanding its electric van manufacturing operations in Ellesmere Port near Liverpool, after shutting its Luton plant last year,
The company is also spending £50 million to overhaul the former Vauxhall Astra plant to build electric mid-size vans for its brands, including Vauxhall, from 2027 in a bet that the market environment for electric vehicles will improve in the UK. Vans such as the Vivaro Electric will be built alongside electric compact vans that Stellantis already produces there in limited numbers.
Cappellano said the Ellesmere Port plant was safe despite the deterioration of EV sales but has implored the government to address concerns of manufacturers, who say they are losing money selling EVs at a discount in order to expand the market beyond its natural level.
Cappellano and Stellantis UK head Eurig Druce met with UK secretary of state for business and trade Peter Kyle to present their concerns over an issue that is affecting all UK car makers; many are selling EVs at a loss rather than suffer fines (£12,000 per car sold over the allowed limit).
“We need an alignment between industrial strategy and our ability to succeed commercially in the marketplace,” said Cappellano.
Stellantis sold just over 200,000 cars in the UK last year, making it the country’s second-largest car maker after the Volkswagen Group, according to Society of Motor Manufacturers and Traders (SMMT) figures.
A fifth of Stellantis’s sales were electric last year, putting the company behind the curve on the 28% EV share required by the ZEV mandate. That share rises to 32% this year, which again looks daunting given EV sales made up just 22% in the first two months of 2026.
The UK government recently loosened the rules around the mandate, with flexibilities including CO2 savings pushing the real figure for Stellantis to around 26% this year, said Druce.
The SMMT has said car makers were discounting electric cars last year by an average of £11,000, around £3000 more than discounts offered for combustion-engined cars.
Stellantis has recently addressed the affordability of its electric cars with new small models such as the Citroën ë-C3, Vauxhall Frontera and Fiat Grande Panda build on the company’s ‘Smart Car’ platform, which incorporates lower-cost lithium-iron-phosphate (LFP) batteries. The ë-C3 starts from £19,035 for the new Urban Range model, with a smaller, 29.8 kWh battery.
However car makers in general are struggling with higher costs in the electric compact segment, where customers require longer-range batteries and competition is stiffer from Chinese rivals, which have access to cheaper batteries.
In January Chinese car brands captured 14% of the UK market, moving ahead of the Japanese. In the EV segment the Chinese made bigger strides, taking a 17% share, down largely to the Leapmotor C10, BYD Seal and MG S5.
Stellantis does at least have a stake in Leapmotor’s success via its ownership of the Chinese brand’s export operations. And as Autocar recently reported, the company is also looking to adopt Leapmotor’s electric platform for future EVs from its own European brands.
The competitive pricing offered by Chinese manufacturers limits what European brands can set.
Stellantis is also concerned that the market for electric vans remains depressed, with the EV penetration at just 10% for the first two months of 2026, against a ZEV mandate target of 24% this year.
A smaller electric van market reduces the volumes needed from Ellesmere Port. The plant built fewer than 5000 electric compact vans for the UK last year, with the majority of work coming from constructing van bodies that were shipped to Algeria.
However, that work will dry up as Stellantis’s Algerian plant establishes a body shop of its own, meaning Ellesmere Port will depend on the bigger electric vans built from 2027. The government has worked to help van makers with the Plug-in Van Grant that runs until April 2026, handing over £2500 for buying small EVs up to 2.5 tonnes and up to £5000 for larger EVs up to 4.25 tonnes.
The government has also adjusted the van element of the ZEV mandate to allow electric cars to also contribute to the target. The support is such that, so far, Stellantis has not extended to the UK its European scheme, launched on 5 March, that drops its electric vans to diesel prices.
Stellantis is also asking for government help to renegotiate the post-Brexit Trade and Cooperation Agreement (TCA) with the European Union, which says that from 1 January 2027, 55% of the value of an electric car must be from the EU and/or the UK.
On top of this, 65% of the value of the content of a cell or 75% of the battery pack must be from the EU and/or the UK.
“We hope to see an agreement between the UK and the EU regarding that during the course of the year,” SMMT CEO Mike Hawes said in January.
