The European Commission has informally suggested altering customs calculations and postponing the Brexit tariffs for roughly one year. However, British industry leaders insist that a two-year extension is necessary to prevent recurring negotiations and provide sufficient time to establish domestic battery production. Without an intervention, 82% of European electric vehicle exports to the UK will be subject to duties by 2027, creating an estimated €1.47bn (£1.23bn) cost burden next year alone.
Key points
Carmakers across both jurisdictions remain reliant on battery imports from China, Japan,…: Carmakers across both jurisdictions remain reliant on battery imports from China, Japan, and South Korea because regional gigafactories have failed to scale.
Industry leaders warn that any tariff extension shorter than two years will simply force…: Industry leaders warn that any tariff extension shorter than two years will simply force negotiators to repeat the exact same debate next year.
Broader disputes over access to "Made in Europe" subsidies and alignment on Chinese vehic…: Broader disputes over access to "Made in Europe" subsidies and alignment on Chinese vehicle import duties continue to complicate the technical negotiations.
Sources checked by our analysis pipeline: 1
The UK car industry is preparing to push for a two-year delay to Brexit tariffs on electric cars traded with the EU, after an initial European proposal suggested a shorter delay.
Tariffs are due to kick in on 1 January for the majority of electric cars traded between the EU and UK unless the two sides can come to an agreement to delay for a second time the implementation of “rules of origin” on batteries.
The Brexit deal, rushed through on Christmas Eve in 2020, included a clause that British and European electric cars would have to use batteries made in either the UK or the EU with local materials, or face 10% tariffs. The rules would not have existed had the UK remained in the EU.
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