Government acknowledges concerns over EV tariffs

Home > Industry Analysis > Content

【Summary】The UK government is addressing concerns over potential tariffs on electric vehicles (EVs) raised by the Society of Motor Manufacturers and Traders (SMMT). The SMMT called for a delay in the introduction of 'rules of origin' regulations, which would impose tariffs on EV exports between the UK and EU if at least 45% of their value does not originate in either region. The SMMT warned that this could lead to a price increase of £3,400 on EU-manufactured EVs in the UK.

FutureCar Staff Oct 19, 2023 6:22 AM PT

Government acknowledges concerns over EV tariffs

Ministers have acknowledged the concerns raised by the automotive industry regarding future tariffs on electric vehicles (EVs). The Society of Motor Manufacturers and Traders (SMMT) recently called for a delay in the implementation of 'rules of origin' regulations. These regulations would impose a ten percent tariff on exports of electric cars between the UK and EU from January 1, unless at least 45 percent of their value originates from either the UK or EU.

SMMT CEO Mike Hawes expressed his worries about the potential impact of these rules, stating that they could lead to an average price increase of £3,400 for EU-manufactured battery electric vehicles purchased in the UK. He emphasized the importance of Europe as the sector's primary trading partner and urged the government to intervene.

In response to these concerns, business secretary Kemi Badenoch addressed the issue during a conference. She highlighted recent investment decisions made by car companies such as Ford, Stellantis, and BMW as a vote of confidence in the UK's motor industry. Badenoch assured the audience of the government's commitment to free trade and stated that they would continue to listen to the motor industry's feedback.

Badenoch further emphasized the UK's leading position in the automotive sector and its efforts in developing zero-emission and green technologies to achieve net-zero emissions. She announced plans to unveil an Advanced Manufacturing Plan in the coming months to ensure the competitiveness of the UK automotive industry. However, she stressed that the government would not engage in distortive subsidy battles and rejected protectionism, stating that free trade is crucial for prosperity. The government's strategy involves targeted and strategic actions, building on the innovation ecosystem, focusing on sectors of comparative advantage, and maintaining a competitive business environment. Badenoch assured the industry that she would continue to advocate for their interests within the government.