Stellantis, the multinational automotive group behind brands like Vauxhall, Citroën, and Peugeot, has confirmed the closure of its historic Luton factory. The site, which has been producing vehicles since 1905, will cease operations in 2025, jeopardizing approximately 1,100 jobs. Production of the Vauxhall Vivaro and other van models will be consolidated at Stellantis's Ellesmere Port facility in Cheshire.
The closure comes amid challenges posed by the UK’s zero-emission vehicle (ZEV) mandates, which require carmakers to ensure a growing percentage of their sales are fully electric vehicles. Stellantis and other manufacturers have argued that current EV demand is insufficient to meet these targets, citing high costs for consumers and limited government incentives.
Business Secretary Jonathan Reynolds acknowledged the “seriousness and urgency” of the situation, stating that the government would review the ZEV mandate to address industry concerns. Under current rules, 10% of van sales must be zero-emission in 2024, with penalties of £15,000 for each sale outside the quota.
The Society of Motor Manufacturers and Traders (SMMT) warned that these regulations could cost carmakers £6 billion in 2024 alone, threatening business viability and jobs across the UK.
Stellantis will invest £50 million into its Ellesmere Port site, which has been revamped as a hub for EV production. The plant will take over manufacturing of the Vivaro electric van, as well as electric models from other Stellantis brands, including Citroën, Peugeot, and Fiat.
The company promised to create “hundreds of permanent jobs” at Ellesmere Port and provide relocation support for workers impacted by the Luton closure. However, unions and local officials criticized the move as a blow to Luton's rich manufacturing legacy.
Unite, the union representing many of the affected workers, called the decision “a complete slap in the face” and vowed to fight to preserve vehicle manufacturing in Luton. “We stand ready to support our members in doing whatever we can to ensure that historical vehicle manufacturing is maintained in Luton,” the union stated.
The Luton factory, which once employed 37,000 people at its peak, has faced declining operations since the 1960s. It transitioned from car to van production in 2002 and was slated to produce electric vans starting in 2025 before Stellantis’s decision.
The closure of the Luton plant highlights broader issues facing the UK’s automotive industry. Rival manufacturers like Nissan and Ford have also expressed concerns over the ZEV mandate. Nissan warned that the regulations are undermining the business case for UK-based EV production, while Ford recently announced plans to cut 800 jobs, partly due to weaker EV demand.
Although electric vehicle sales are growing—nearly one in four cars registered in October 2024 was electric—industry insiders argue that this growth relies heavily on unsustainable discounts.
SMMT chief executive Mike Hawes emphasized the need for “workable regulation” and stronger government support to make EV adoption more affordable and attractive to consumers. The UK government has committed over £300 million to drive zero-emission vehicle uptake but faces mounting pressure to revise its EV strategy.
