Vauxhall, Opel Future in U.K. Hinges on Post-Brexit Supply Issues

(Bloomberg) -- Stellantis NV, the owner of Vauxhall and Opel plants in the U.K., will decide in the coming weeks on the future of those factories after freezing investments for months due to Brexit-related uncertainties.

The automaker formed from the merger of PSA Group and Fiat Chrysler is encouraged by the trade accord reached late last year with the European Union, Chief Executive Officer Carlos Tavares told Bloomberg Television Tuesday. The agreement spares vehicles from tariffs as long as manufacturers source enough parts content from the U.K. or EU.

Tavares spoke on the occasion of Stellantis making its U.S. market debut after listing shares in Milan and Paris on Monday. The stock rose as much as 13% to $17.21 on Tuesday in New York.

It’s still not clear if the deal ensures the long-term viability of Stellantis’s facilities in Ellesmere Port and Luton, England, which make Vauxhall and Opel branded compact cars and commercial vans. The company is in the process of assessing whether it makes sense to invest in the U.K. or continental Europe based on the the potential that costs and bureaucracy complicates supplying parts to its assembly plants, Tavares said.

Stellantis and its automotive rivals are racing to electrify their lineups to comply with tougher emissions standards and outright bans of internal combustion engines by some governments, including the U.K. The country’s car-industry trade group said earlier this month that localizing a battery supply chain will be key to safeguarding the future of British vehicle manufacturing.