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EV would be more expensive from 2024.

 Carmakers have warned the prices of many electric vehicles made or sold in the UK and Europe could jump 10 per cent or more from 2024 after Brussels said it would not extend tariff exemptions agreed in the Brexit trade deal. The UK-EU Trade and Cooperation Agreement temporarily exempted EVs from rules stating products must be substantially made in Britain or the bloc to qualify for the EU’s zero tariffs, zero quota regime because such a large proportion of EV batteries are imported from Asia. However, both EU and UK auto manufacturing groups are asking for the rules of origin exemption to be extended from December 31, 2023, because there are not enough batteries and precursor chemicals being made in Europe. If London and Brussels do not agree to a change, many EVs moving between the two will pay 10 per cent tariffs, increasing consumer prices.

Under the TCA, a maximum of 45 per cent of the value of products is allowed to originate from outside the EU to benefit from zero-tariff trade. However, until January 1, 2024, at least 40 per cent of the content of electric vehicles and 30 per cent of batteries must originate from the EU or the UK. From 2024 until January 1, 2027, this increases to 45 per cent of electric vehicles and 50-60 per cent of batteries. If this is not met, carmakers will pay 10 per cent tariffs.

«I do not think the battery manufacturing capability in the UK or Europe will expand enough to meet demand,» he added. However, an EU official said Brussels was «not open to changes to the rules of origin». «We are determined to ensure the UK remains one of the best locations in the world for automotive manufacturing, especially as we transition to electric vehicles. So we agreed to a zero tariff, zero quotas deal with the EU, which includes modern rules of origin for the automotive sector,» said a spokesperson.

More than a dozen major battery factories are set to open in Europe this decade to cater for the growing number of electric vehicles made in the region. EU member states could pressure Brussels into accepting rules of origin changes if London also agrees. Spain is the second largest automaker in Europe by volume, producing 16 electrified models.

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  1. Will6 December 2022 at 20:02

    They should extend the exemption for at least another 2 years beyond 2023. EV prices must go down or remain the same if more people are expected to get one.

    ReplyDelete

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