Post-Brexit EV tariffs causing UK price rises

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【Summary】The European Automobile Manufacturers Association is urging the European Commission to prevent new taxes that could increase the price of electric cars exported and imported between the UK and EU. If the request is not complied with, a 10% tariff will be imposed on electric vehicle exports to the UK from January 2024, potentially costing manufacturers 4.3 billion Euros over three years and reducing EV production by nearly half a million vehicles.

FutureCar Staff Sep 25, 2023 9:17 AM PT

Post-Brexit EV tariffs causing UK price rises

An "urgent plea" has been made to the European Commission by the European Automobile Manufacturers Association (ACEA) regarding new taxes that could increase the price of electric cars exported and imported between the UK and EU. ACEA warns that if the request is not complied with, a 10 percent tariff will be imposed on electric vehicle exports to the UK, which is its largest trading partner, starting in January next year. This could result in a cost of 4.3 billion Euros for ACEA members over three years and potentially lead to a reduction in electric vehicle production in mainland Europe by almost half a million vehicles.

The tariffs are expected to be implemented based on the "rules of origin" regulations negotiated as part of the Brexit arrangements. These regulations require all battery parts and certain battery raw materials to be sourced locally within the EU or UK. According to ACEA, meeting this requirement is currently "practically impossible."

Luca de Meo, ACEA President and CEO of Renault Group, commented on the situation, stating that increasing consumer prices of European electric vehicles at a time when market share needs to be fought for against international competition is not the right move, both from a business and environmental perspective. De Meo argues that this could result in a significant portion of the market being taken over by global manufacturers. He emphasizes the importance of supporting the industry's transition to net-zero and urges the European Commission to extend the phase-in period for the new regulations by three years.

The UK government and UK car makers express optimism that a new agreement can be reached before the January 2024 deadline. However, reports suggest that there is not universal acknowledgement of political consensus for such a move across the Channel. Thierry Breton, the EU's internal market commissioner, recently stated that negotiated agreements should not be changed. The Brexit arrangements are considered politically sensitive within the European Commission, as acknowledged by ACEA sources.

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