High prices put electric car market at risk, says Stellantis

THE electric vehicle market could “collapse” unless more is done to bring down prices, a senior industry executive has warned.

Arnaud Deboeuf, chief manufacturing officer at Stellantis, said the price of electric cars meant sales figures were at risk of “collapse”. Stellantis is one of the world’s biggest car manufacturers and owns the Vauxhall, Peugeot and Fiat brands.

Electric models can cost about £10,000 more than petrol-driven equivalents. While most drivers will make up the difference on cheap charging compared to expensive diesel and petrol, high initial prices could put off or exclude many buyers. Mr Deboeuf called the situation “a big challenge”.

The comments came as new figures showed electric car production in the UK is gathering pace, in a rare bright spot for the industry.

The number of finished electric vehicles more than doubled in May, with 4,525 battery powered vehicles rolling off factory lines.

In May there was the first rise in overall UK car production for 11 months, according to figures from the Society of Motor Manufacturers and Traders (SMMT), with 62,284 cars made in total.

But a terrible start to the year means production remains down 23pc so far this year. Only 330,185 cars have been completed, raising the prospect of a third year in a row with fewer than 1m vehicles made in Britain.

While demand is holding up, supply of critical components such as computer chips is running short.

Richard Peberdy, at KPMG, said: “The UK automotive sector’s recovery from the disruption of the last two years remains deeply troubled. High energy costs are clearly part of that picture and will further challenge the resilience of UK carmakers.”

The industry faces £90m in extra spending from higher energy costs, the SMMT said this week. Britain’s industry already spends £50m more than its EU competitors on power, it says.