THE UK WILL CONSULT ON SALES TARGETS FOR AUTOMAKERS DURING THE TRANSITION TO ELECTRIC VEHICLES

Stellantis blamed its decision Tuesday to close its plant in Luton on the U.K.’s “stringent” zeroemission vehicle mandate, or ZEV, which sets strict targets for manufacturers.

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With demand in many parts of the world the world for electric vehicles weaker than anticipated, despite the discounts on offer, it is increasingly expensive for carmakers to turn a profit, especially with sluggish global growth and relatively high interest rates.

Other manufacturers across Europe, including Ford and Volkswagen, recently announced plans to close some operations in light of targets they are struggling to meet.

The mandate in the U.K. requires major car manufacturers to have zero-emission — in effect, purely electric — vehicles make up 22% of their sales fleet this year, increasing to 28% in 2025 and rising further in subsequent years. If a manufacturer does not hit the targets, it is fined 15,000 pounds ($19,000) for every vehicle that it sells that does not comply with the mandate.