Brexit trade impact on electric vehicle prices.

author: FutureCar Staff    

An automotive industry body has warned that post-Brexit trade rules could lead to a £3,400 increase in the price of electric vehicles (EVs). The Society of Motor Manufacturers and Traders (SMMT) stated that unless trade rules are delayed, the price hike will take effect from the beginning of next year. The UK and EU are set to implement stricter rules on the origin requirements of EV batteries, with tariffs of 10% expected to be imposed on exports of electric cars between the two entities from January 1. This will occur unless at least 45% of their value originates in the UK or EU.

The SMMT estimated that manufacturers will struggle to meet the threshold as battery production within Europe has not increased as quickly as anticipated. As a result, the tariffs could result in an average price rise of £3,400 on EU-manufactured pure battery electric vehicles purchased in the UK. Nearly half (49%) of all pure battery electric vehicles bought by UK buyers are from the EU. The SMMT also highlighted that conventional petrol and diesel vehicles would not be subject to tariffs, which could incentivize the purchase of fossil fuel-powered vehicles.

The SMMT described 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 ramp up. Speaking before an SMMT virtual global trade conference, the organization's chief executive, Mike Hawes, emphasized the importance of the UK automotive industry as a trading powerhouse that contributes billions to the British economy. He stated that unnecessary and ill-timed rules of origin would hinder the industry's recovery and disincentivize the sale of electric vehicles.

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

FutureCar Staff