European carmakers call for three-year delay to post-Brexit trade rules electric car – warned of lost production and a potential €4.3bn (£3.7bn) tariff hit.
Regulations restricting trade in electric vehicles between the EU and the UK will come into effect in six months. The requirements are subject to “rules of origin,” meaning EV batteries must be assembled in Europe to be exempt from tariffs.
Strict rules will come into force in 2024, requiring all battery components (and some battery materials) to be produced in the EU or the UK to be eligible.
Cars built in Europe and imported into the UK will face a 10% tariff if the rules are not changed. The UK is the biggest export market for the EU car industry, accounting for a quarter of EV exports.
three year delay
Sigrid de Vries, director-general of ACEA, the EU’s car trade body, said: “Europe currently does not have a safe and reliable battery supply chain in place to meet these stricter rules.”
“It will take time to build up the required capacity… At the same time, automakers have to rely on batteries or materials imported from Asia.
“We ask the European Commission to extend the current phase-in period by three years.”
huge cost
Without delay, ACEA said the 10% tariff would cost almost 4.3 billion euros over the three-year period from 2024 to 2026.
“It’s not only bad for the EU auto industry, it’s not good for the European economy,” added Sigrid de Vries. “As we face increasing competitive pressure from abroad, the application of these rules will electric car Made in Europe. “
Without delay, the tariffs could slash EV production in the EU by as much as 480,000 vehicles, ACEA estimates. This is equivalent to the output of two medium-sized car plants.
China threat
Despite a 10% tariff, electric cars made in China already account for around a third of the UK market.
If European automakers are forced to pay the same tariffs, “they will obviously lose out to competition from third countries. Failure to act now will erode our ability to remain competitive … and lead to a loss of market share,” de Vries said. — and it will be extremely difficult to regain market share.”
The European Commission has yet to comment on calls to delay post-Brexit trade rules.
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