Vauxhall‘s owner has warned it may be forced to halt production in the UK unless the government does more to encourage demand for electric vehicles.

Stellantis said on Tuesday (June 25) it would have to close plants at Ellesmere Port near Liverpool and in Luton unless ministers relax rules forcing manufacturers to sell a certain proportion of EVs.

The company also threatened to cut the number of petrol and diesel cars it sells in Britain amid a row over the Zero Emission Vehicle (ZEV) mandate.

A decision over whether or not to close the two plants could come “in less than a year”, according to remarks made by Maria Grazia Davino, UK Managing Director for Stellantis, quoted by the BBC.

She told reporters at a car industry conference that the ZEV mandate would have a major impact and that it “damages” the UK.

Under the mandate, 80 percent of new cars and 70 percent of new vans sold in the UK will have to be zero emission by 2030. This increases to 100 percent by 2035.

Ms Davino, quoted by the Telegraph, said Stellantis has undertaken “big” investments in Ellesmere Port and Luton with more to come.

She warned: “But if this market becomes hostile to us, we will enter an evaluation for producing elsewhere.”

Stellantis wants the electric vans it produces in Britain to count towards its quota, according to the Telegraph.

It also wants the Government to bring in more financial incentives to encourage sales of EVs.

Ms Davino said discounts are needed to boost an EV market “that isn’t there”, with price tags for EVs having “a number of consequences for the business case”.

Ellesmere Port employs about 1,100 while Luton has some 1,500. In February, Stellantis announced it would make electric vans at the Bedfordshire plant.

The announcement was hailed at the time as good news for Britain’s automotive industry.