The European Commission has proposed to delay the post-Brexit tariffs on electric vehicles traded between the UK and EU by three years and has announced a €3 billion support package for the EU battery industry.
Currently, the details of the post-Brexit Trade and Cooperation Agreement indicate that starting from January 1, 2024, new ‘rules of origin’ requirements will be enforced.
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These rules stipulate that car manufacturers on both sides of the English Channel will be exempt from tariffs only in the highly unlikely case that more than 45% of the electric vehicle’s components and 60% of its battery value originate from either the UK or the EU.
The proposal to delay such tariff will be voted on by the 27 members in a meeting next week, providing car manufacturers with the opportunity to escape a significant tariff of 10%.
In statements made on Wednesday, the Vice-President of the European Commission, told reporters in Brussels: “We have opted to suggest a singular extension, maintaining the existing regulations until December 31, 2026.”
The news will be welcomed by both UK a European manufacturers. Last month, Renault, BMW, and Mercedes-Benz, among other major car manufacturers, urged EU leaders to postpone the implementation of tariffs.
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By GlobalDataAdditionally, in a move that aims to reduce the EU’s reliance on Chinese battery imports, the European Commission has unveiled a €3 billion financial support package for the European battery industry.
Paul Barker, Managing Editor of Carwow UK, said: “This news will be a big relief to manufacturers and motorists alike. The end-of-year cliff-edge would have impacted the EV transition both in the UK and EU, with steep tariffs affecting car buyers as well as carmakers, who rely heavily on cross-border sales. The fact remains that most EVs still rely on materials sourced from Asia, particularly batteries, so this extension means common sense has prevailed.”
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