British car factories will be forced to close with the loss of thousands of jobs if the UK government does not renegotiate its Brexit deal immediately, automaker Stellantis has warned.
Stellantis owns the Vauxhall, Peugeot, Citroen and Fiat brands.
It told the British parliament that under the current deal it would face tariffs when exporting electric vans to Europe from next year when tougher post-Brexit rules come into force.
The carmaker urged the government to reach an agreement with the European Union about extending the current rules on the sourcing of parts until 2027 instead of the planned 2024 change.
In response, a government spokesperson said the business secretary had raised the issue with the EU.
"If the cost of EV manufacturing in the UK becomes uncompetitive and unsustainable, operations will close," Stellantis said in a submission to a House of Commons committee examining the prospects for Britain's electric vehicle industry.
"Manufacturers will not continue to invest and (instead will) relocate manufacturing operations outside of UK, as seen with previously established UK manufacturers such as Ford and Mini," the company added.
Under the trade deal agreed when Britain left the bloc, 45% of the value of an electric vehicle must come from Britain or the EU from 2024 to avoid tariffs.
In order to save its car industry, Britain needs to not only extend the timeframe with the EU but urgently attract battery manufacturers and other auto suppliers to set up here, Andy Palmer, former chief operating officer at Nissan, told BBC radio.
"The cost of failure is very clear. It's 800,000 jobs in the UK, which is basically those jobs associated with the car industry," said Mr Palmer, who is also chairman of European battery manufacturer InoBat.
"If you don't have a battery capability in the UK, then those car manufacturers will move to mainland Europe," he added.
The British car trade group, the Society of Motor Manufacturers and Traders, said in its submission that the current manufacturing capability in the EU and Britain would not allow the sector to meet the requirements for batteries and battery parts.
The warnings echo wider fears within the industry that the British car sector does not have the capacity or the supply chain to switch to electric vehicles, a huge risk at a time when carmakers globally are selecting sites to build new battery gigafactories.
Britain has drawn electric vehicle investment from Nissan and Ford, while other big players are still weighing up where to invest.
Stellantis had announced a £100m electric vehicle investment in its Ellesmere Port site in 2021.
It said in the submission that when it made that announcement it had believed it would be able to create enough parts in Britain or Europe to meet the rules.
"We are now unable to meet these Rules of Origin," it said, citing external factors such as the war in Ukraine, supply issues and raw material cost inflation.
Ford has also today called for post-Brexit EU trade requirements on rules of origin for electric vehicles (EVs) to delayed until 2027 from 2024.
The US car giant said that tariffs will add pointless costs for consumers and slow the transition to electric.
"Ford is calling for current trade requirements to be extended to 2027, to allow time for the battery supply chain to develop in Europe and to meet EV demand," the company said in a statement.
"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," it added.
Ford is investing £380m to build e-motor capacity at an engine plant in Liverpool, part of electrification plans across Europe.
Ford warned that the car industry in the UK does not have enough locally-sourced batteries and components to meet demand.
"Tightening the trade rules at this point risks undermining the switch to EVs with tariffs," Ford said.
"Manufacturers who have invested heavily early in the transition will be hardest hit by tariffs because combustion engine vehicles will continue to move tariff-free," it added.
