Vauxhall owner could sell off ‘underperforming’ brands as electric car push cripples industry
Consumer interest in EVs has plummeted in recent months
REUTERS
The boss of popular car owner Stellantis has warned that the company may be forced to sell underperforming brands as the push for electric cars continues to impact the sector.
The owner of UK car manufacturer Vauxhall stated that due to the electric vehicle crisis and rush to production, many carmakers are well below targets.
Stellantis saw sales rapidly drop in the first six months of the year with lack of interest from consumers cited as a key issue.
Speaking to investors, after the 48 per cent decline in profits, the company stated that it was an “understatement to say the results were disappointing”.
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Profits slumped by 48 per cent
VAUXHALLCarlos Tavares, boss at Stellantis stated: “The company’s performance in the first half of 2024 fell short of our expectations, reflecting both a challenging industry context as well as our own operational issues.
“We have significant work to do, especially in North America, to maximise our long-term potential. I want to thank every employee for their teamwork and commitment during this very consequential chapter of our story.”
But speaking to Autocars, Taveras warned that to combat the losses, brands that “don't make money, will shut down”.
He detailed how the company cannot afford to have brands that do not make money especially during tough times.
The company has been very vocal about the impact the UK’s net zero targets have had on the car industry.
The drive to have 100 per cent of new car sales by 2035, a goal set out by the previous Conservative Government, has put serious strain on the manufacturers.
To meet these goals, at least 22 per cent of new cars and 10 per cent of new vans sold by each manufacturer in the UK this year are required to have zero emissions.
In June, the Vauxhall owner said more needed to be done to support drivers in transitioning to electric cars, highlighting the implementation of the Zero Emission Vehicle mandate.
Brands can be slapped with fines of up to £15,000 per polluting vehicle sold above the limits, although experts predict that fines won't be levied as brands can purchase credits from other manufacturers.
Taveras described the scheme as "terrible for the UK", as it restricts the sale of petrol and diesel cars over the coming years.
He suggested that it would cause brands to be forced to cut prices of new EVs to unprofitable levels in a bid to meet the new regulations.
This has already happened, with Stellantis recently partnering with Chinese EV giant Leapmotors to start selling cheaper models from September.
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Chinese T03 could cost as little as £17,000
STELLANTISChinese T03 model is expected to sell for roughly £17,200 in the UK. It is already on the Chinese market for as little as 49,900 yuan (£5,500).
The T03 is a small five-door which can travel 165 miles and comes in at a much lower price point than other EVs currently selling in the UK.
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