Brexit trade barriers impact EV drivers with increased costs

author: FutureCar Staff    

British drivers may face an additional cost of £3,000 to £5,000 for electric cars due to Brexit trade barriers. These barriers include new tariffs and rules that will slow down the manufacturing process. Carmakers are urging Brussels and Westminster to renegotiate their trade deal before January, when the "rules of origin" will be implemented. These rules state that electric vehicles must have a certain percentage of locally produced content, ranging from 45% to 60%, depending on the component. Failure to meet these requirements could result in import tariffs of up to 10%. For example, an entry-level Mini Cooper Electric could see a price increase of at least £3,000, while a BMW i4 could see an increase of £5,200.

The impact of Brexit on the automotive industry goes beyond increased costs for British drivers. The European Automobile Manufacturers Association (ACEA) warns that the strict interpretation of the Brexit deal could cost the European Union €4.3 billion (£3.75 billion) in tariffs and output losses over the next three years. This could also undermine Europe's efforts to transition to zero emissions and give an advantage to Chinese competitors. ACEA's president and Renault CEO, Luca de Meo, argues that raising consumer prices for European electric vehicles is counterproductive and that Europe should support its industry in the transition to net-zero emissions.

Both British and EU carmakers are calling for a postponement of the rules until 2027, as they claim their EV supply chains and battery-building plants are not yet prepared to meet the requirements. Failure to renegotiate the rules of origin agreement could lead to the closure of some British operations for car manufacturers such as Vauxhall, Peugeot, and Fiat. While the UK Business Secretary, Kemi Badenoch, hopes for a deal, the European Commission has so far refused to reopen negotiations.

The UK imports 1.2 million vehicles from the EU annually, while also shipping a significant number of cars to the EU. However, Europe is struggling to increase its capacity to meet the growing demand for electric vehicles. This issue arises as the UK recently announced a delay in the ban on new petrol and diesel cars and vans until 2035, and the EU agreed on lower-than-expected Euro 7 emissions standards. These decisions have faced criticism from environmental campaigners. Additionally, the EU is concerned about competition from Chinese EVs and has launched an investigation into potential illegal government subsidies for Chinese car firms.

FutureCar Staff