Brexit trade barriers impact Mini Cooper Electric car pricing

author: FutureCar Staff    

British drivers may face additional costs of £3,000 to £5,000 for electric cars due to Brexit trade barriers. This is a result of new tariffs and rules that will slow down manufacturing and add 10% to the cost of new cars. Carmakers are urging Brussels and Westminster to renegotiate their trade deal before January, when the "rules of origin" come into effect. These rules require electric vehicles to have a certain percentage of locally produced content, ranging from 45% to 60% for battery cells and packs.

If carmakers fail to meet these requirements, they could face import tariffs of up to 10% from either the UK or the EU. This means that entry-level electric cars such as the Mini Cooper Electric, Volkswagen ID.3, Renault Megane E-Tech, and BMW i4 could see price increases ranging from £3,000 to £5,200. The European Automobile Manufacturers Association (ACEA) warns that Brexit could cost the EU €4.3 billion in tariffs and output losses over the next three years, while also raising the prices of new electric vehicles in the UK.

The ACEA believes that a strict interpretation of the Brexit deal could have a devastating effect on carmaking in Europe. It could hinder Europe's transition to zero emissions and give market share to Chinese rivals. The president of ACEA and CEO of Renault, Luca de Meo, stated that increasing consumer prices for European electric vehicles is not the right move, especially when facing fierce international competition. Carmakers in both the UK and the EU are calling for a postponement of the rules until 2027, as their EV supply chains and battery-building plants are not yet prepared to meet these demands.

The Business Secretary, Kemi Badenoch, hopes that a deal can be reached, but the European Commission has not shown willingness to reopen the deal. While EU Trade Commissioner Valdis Dombrovskis supports flexibility, EU Internal Market Commissioner Thierry Breton sees the looming deadline as an opportunity to encourage EU carmakers to invest in battery plants and lithium hydroxide. The UK imports 1.2 million vehicles from the EU annually, while also shipping more cars to the EU than any other region.

Global electric vehicle sales are projected to grow by nearly a third in 2023, reaching over 14 million units. However, Europe is struggling to increase its capacity in this area. The EU is particularly concerned about competition from Chinese EVs distorting its market, prompting an investigation into potentially illegal government subsidies for Chinese car firms. Meanwhile, in the UK, Prime Minister Rishi Sunak recently announced a delay in the ban on new petrol and diesel cars and vans until 2035, which has drawn criticism from environmental campaigners. Additionally, EU ministers agreed on new lower-than-expected Euro 7 emissions standards, further exacerbating environmental concerns.

FutureCar Staff