Stellantis NV, one of the world's largest automakers, has urged the UK government to renegotiate aspects of the Brexit deal to avoid potential harm to the car industry and factory closures.
The Amsterdam-headquartered company, which produces brands including Vauxhall, Peugeot, Citroen, and Fiat, previously committed to manufacturing electric vehicles (EVs) in the UK.
However, due to increased raw material costs amid the pandemic and energy crisis, it now claims it can't meet the trade deal's rules on part origins.
Without an agreement to maintain current rules until 2027, Stellantis warns that trade between the UK and EU could face a 10% tariff, making UK production and exports less competitive.
The UK government has reportedly discussed the issue with the EU and pledged to take decisive action to encourage investment in zero-emission vehicle manufacturing.
Another major UK manufacturer, Ford Motor, later added its voice to calls for a rethink, stating that post-Brexit EU trade requirements on rules of origin for electric vehicles (EVs) need to be delayed until 2027 from 2024.
Tariffs will add pointless costs for consumers and slow the transition to electric vehicles, it said, while a delay would allow time for Europe's battery supply chain to develop to meet demand.
Ford, which is investing £380mln to build e-motor capacity at an engine plant in Liverpool, added: "Tariffs will hit both UK- and EU-based manufacturers, so it is vital that the UK and EU come to the table to agree a solution."
Earlier, Labour leader Keir Starmer had also called for a "better" Brexit deal to be negotiated.
-- adds Ford comments--