Brexit impact on EV prices

author: FutureCar Staff    

An automotive industry body has warned that electric vehicle (EV) drivers in the UK may face a £3,400 increase in car prices unless post-Brexit trade rules are delayed. The Society of Motor Manufacturers and Traders (SMMT) stated that this price hike will come into effect from the start of next year if trade rules are not postponed.

Under the post-Brexit trade agreement, the UK and EU are planning to implement stricter rules on the origin requirements of EV batteries. Starting from January 1, tariffs of 10% will be imposed on exports of electric cars between the UK and EU if at least 45% of their value does not originate in either the UK or the EU.

Manufacturers are expected to struggle to meet this threshold as battery production within Europe has not grown as quickly as anticipated. The SMMT estimated that these tariffs could result in an average price increase of £3,400 on EU-manufactured pure battery electric vehicles purchased in the UK.

Currently, nearly half (49%) of all pure battery electric vehicles bought by UK consumers are from the EU. The SMMT pointed out that conventional petrol and diesel vehicles will not be subject to tariffs, which could inadvertently encourage the purchase of fossil fuel-powered vehicles.

The SMMT proposed a three-year delay in implementing the new rules of origin requirements as a pragmatic solution. This delay would allow time for European battery production to increase.

The chief executive of the SMMT, Mike Hawes, emphasized the importance of the UK automotive industry and its contribution to the British economy. He stated that unnecessary and untimely rules of origin would hinder the industry's recovery and discourage the sale of EVs.

The UK government acknowledged the need for a joint UK-EU solution to avoid imposing tariffs on electric vehicles from 2024, which would not apply to petrol and diesel cars.

FutureCar Staff