The manufacturer of London’s fleet of electric taxis has warned suppliers that they face at least a month without payments, putting pressure on an already-stressed automotive supply chain.
Sky News has learnt that the London Electric Vehicle Company (LEVC) wrote to its production partners earlier this month to invoke a ‘force majeure’ clause in contracts.
LEVC, which is owned by the Chinese car-maker Geely, told suppliers in a letter that “despite LEVC’s implementation of measures to minimise the impact of the COVID-19 epidemic/pandemic to maintain production and keep its offices and sites open, the situation has now escalated beyond control”.
“As a result, we will be unable to meet our obligations in relation to [your] agreement including, without limitation, our ability to: schedule future orders; process and receive supplies; permit access to our site; process payments; or otherwise continue to provide normal supplier support services.”
It warned that the force majeure status would remain in place until at least May 1.
The emergence of LEVC’s warning to its supply chain comes as parts of the automotive sector attempt a tentative resumption of their operations.
On Wednesday, Nissan said it would reopen its Sunderland plant for safety tests, paving the way for production to restart in the coming weeks.
Coventry-based LEVC said in a statement: “LEVC is implementing short term measures to minimise the impact caused to the business by COVID-19.
“The temporary suspension of manufacturing and adjustment to production schedules has resulted in a requirement to notify its production suppliers of a force majeure situation for a short period of time.
“LEVC’s business plan for this year remains unchanged and the company is committed to a long term relationship with all of its business partners, and looks forward to returning to full production of the TX electric taxi as soon as possible.”