Carlos Tavares said governments were pushing new technologies before fully understanding their overall environmental impact © Marlene Awaad/Bloomberg

The owner of Vauxhall has signalled that future investment in its car plant at Ellesmere Port is under threat because of Brexit and new UK rules banning petrol car sales by 2030.

Carlos Tavares, chief executive of Stellantis, the newly merged Fiat Chrysler and PSA, warned the British government against “destroying the business model” of its UK operations, saying it had to show a “willingness to protect some kind of auto industry in their country”.

“There is a limit. If one country is putting so many barriers there is no room to make decisions, there is a point where there is an ethical responsibility of the officers of the company to make the appropriate decisions,” he said.

His warning came as shares in Stellantis began trading in the US following the completion of the €50bn merger.

The company owns the Ellesmere Port facility, as well as a Luton van plant, but has withheld investment in the Cheshire plant because of uncertainty over trading conditions after Brexit.

Mr Tavares told a press conference on Tuesday that the company would make an investment decision on the plant within weeks, adding that any new funding would likely be for electric cars because of rules requiring that new vehicles sold in the UK be electric or hybrid after 2030.

But he told the FT carmakers were being forced to produce electric vehicles by “narrow-minded” regulations that ignore carbon emissions from battery production.

Governments were pushing new technologies before fully understanding their overall environmental impact, and he wants regulators to look at the full manufacturing process from start to finish. Electric cars typically cost more than traditional engine vehicles.

“The way we are making decisions today is very narrow-minded,” Mr Tavares said.

He said emissions from making batteries “handicap” electric cars before they even leave the showroom, forcing them to drive higher mileage before beginning to offset their petrol equivalents. This includes pollution from extracting lithium used in batteries.

Carmakers have launched dozens of electric cars, largely to meet tightening emissions rules in Europe and China.

Despite his criticisms of the way the rules are formulated, PSA has sprung from being a laggard in the technology to being one of the leaders in electric vehicles in Europe. Its range of battery and hybrid cars helped the company meet the region’s CO2 targets last year.

“If governments are saying you must go electric, I will go electric, so I will do the best electric vehicles in the world,” he said.

He said the “real question” facing the company was whether carmakers are sidelined by regulators in the future when deciding policies from emissions rules to those around allowing private cars in urban centres.

Carmakers are ignored if they raise objections to the policies, he said, because of the industry-wide fallout from the Volkswagen emissions scandal of 2015.

“I am put in a box, and the box says ‘we are crooks’, then who is going to listen to us,” he asked. “There was a point in time where we tried, there is no one who is willing to listen, so why bother?”

PSA was among carmakers that faced questions over its use of software in diesel cars that allegedly made them less polluting during emissions tests.

The €50bn merger of PSA and FCA was born in part by the need for the two carmakers to save on future investments into battery technology, and to cut development costs across the businesses.

While PSA’s stronghold is in Europe, FCA makes almost all of its profits from its North American region and its Jeep brand.

A formal business plan for the combined groups will not be ready until 2022, Mr Tavares said. “We are going to take our time; this was not a crisis merger,” he added.

Despite the pressure to eke out €5bn of promised annual savings, Mr Tavares pledged to avoid closing any sites — something that PSA also successfully promised during its 2017 takeover of Opel-Vauxhall.

“The synergies do not include plant shutdowns,” he said. “We believe that if we implement our synergies properly we do not need to shut down any plants.”

In Europe, Stellantis will this year continue to pool emissions with Tesla, the Californian electric car maker, to avoid CO2 fines following an earlier deal with FCA that “will be respected”, Mr Tavares said. 

“After the deal ends, then another life starts.”

PSA met the EU rules last year on its own, largely by selling electric cars and lowering the emissions of its standard petrol models.

Mr Tavares said he was “absolutely comfortable that we will be compliant” in the next few years as well.


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