- Jeep maker Stellantis confirmed it will idle an assembly plant in Illinois beginning in February 2023.
- The company attributed the closure to the “increasing cost related to the electrification of the automotive market.”
- Reuters reports that about 1,350 workers would be laid off as a result.
Traditional automobile companies are experiencing growing pains as they transition toward producing more electric vehicles.
Stellantis, which oversees the production of 16 automobile brands, including Jeep, Chrysler, and Dodge, confirmed to Insider that it plans to idle an assembly plant in Belvidere, Illinois, beginning in February 2023.
“Our industry has been adversely affected by a multitude of factors like the ongoing COVID-19 pandemic and the global microchip shortage, but the most impactful challenge is the increasing cost related to the electrification of the automotive market,” the company said in a statement.
Stellantis also said the action would result in “indefinite layoffs.” The plant closure was first reported by Reuters, which reports that the plant employs about 1,350 workers.
The shutdown comes as more car companies pledge to prioritize producing electric vehicles over gas-powered vehicles to comply with new emissions regulations.
Last month, the EU reached a deal to require automakers to reach a zero-emission target by 2035, and in the US, more than one-third of states have signaled that they plan to ban the sale of new gasoline-powered cars by the same year.
In July 2021, Stellantis said 100% of its sales in Europe and 50% of sales in the US would be of battery electric vehicles by the end of 2030.
There are no current plans to resume operations at its Belvidere plant, which produces Jeep Cherokee SUVs.
“The company also is working to identify other opportunities to repurpose the Belvidere facility and has no additional details to share at this time,” Stellantis told Insider.