The future of Vauxhall’s Ellesmere Port car plant is set to be secured through production of a new electric vehicle, with an announcement possible as soon as next week.
Ministers have been in talks with Vauxhall owner Stellantis for months over providing government support for the plant, and Sky News understands the manufacturer has signed off plans to continue production in the North West.
The future of Ellesmere Port plant, which currently makes the Vauxhall Astra, has been under threat since the UK committed to ban new petrol and diesel cars from 2030.
Stellantis said that decision made production of an internal combustion engined successor to the current Astra unviable.
The move comes after Nissan and battery manufacturer Envision announced a £1bn investment in a new all-electric model and “gigafactory” in Sunderland, promising to create 1,650 new jobs and many thousands more in the supply chain.
The government is understood to have contributed around £100m to the Nissan-Envision project and earlier this week Stellantis’s UK country manager Alison Jones told Sky News the government needed to back its rhetoric by supporting manufacturers considering investment.
Automotive News Europe reported on Tuesday that Vauxhall was considering manufacturing an electric van on the Ellesmere Port site. The Financial Times first reported the announcement could be formally made on Tuesday.
Electric vans are a growth market for vehicle manufacturers with concerns over the environmental impact of the huge boom in home delivery, a trend accelerated by the coronavirus pandemic.
The commitment to a new all-electric vehicle should secure the jobs of 1,100 staff directly employed at Ellesmere Port and many more in the supply chain.
The investment will be welcomed by ministers as a further concrete example of inward investment in the UK following Brexit.
Business secretary Kwasi Kwarteng has been leading discussions with Stellantis and has been increasingly confident in recent days that a deal would be agreed.
Stellantis, formed after the merger of Fiat-Chrysler and PSA, which includes Peugeot, has a battery manufacturing deal with French energy company Total to make batteries in France, Germany and one other European location.
Under the terms of the Brexit deal, vehicles manufactured here will need to have batteries supplied from the UK or Europe by 2027 to avoid tariffs.
The move will bring to an end UK production of the Astra, the hugely popular model first produced at Ellesmere Port in 1980.