Skip to main content

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.

www.sba.tax

Labels:

Comments

  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

Post a Comment

Cloud Bookkeeping

HS2 cost cuts new routes and add delays.

 Trans­port depart­ment offi­cials have begun work on «Project Sil­ver­light» sug­gest­ing the high­speed rail scheme might face four addi­tional years of delay. The planned High Speed 2 rail line faces fur­ther delays of up to four years and more cuts to the project under plans being drawn up by min­is­ters to rein in its bal­loon­ing costs. The extra delays to the coun­try’s biggest infra­struc­ture project would mean that it would not be com­pleted until as late as 2045 — 12 years after ori­gin­ally planned. «This is a func­tion of infla­tion; we are hav­ing to find huge sav­ings because the cost of everything the depart­ment is already doing will have become so much more expens­ive by then,» said one gov­ern­ment offi­cial. In Octo­ber, the FT repor­ted that the Treas­ury had asked HS2’s man­age­ment team to identify poten­tial cuts or «scope reduc­tions» to the high-speed line. Trans­port depart­ment offi­cials have sub­sequently begun work on Project Sil­ver­light aimed at fi...
4 comments
Read more

Small business will be excluded from fraud law.

  Min­is­ters are plan­ning to exclude small busi­nesses from anti-fraud legis­la­tion by nar­row­ing the scope of a crim­inal offence tar­get­ing com­pan­ies that fail to pre­vent eco­nomic crimes. MPs and anti-cor­rup­tion cam­paign­ers had hoped the gov­ern­ment would seek to amend the eco­nomic crime and cor­por­ate trans­par­ency bill to ensure the new offence covered all com­pan­ies. The plans to limit the scope of the amend­ments will also dis­ap­point those who had hoped the legis­la­tion would remove key hurdles to the pro­sec­u­tion of white-col­lar crime. A new «fail­ure to pre­vent» offence for fraud would bring it in line with exist­ing sim­ilar cor­por­ate offences for bribery and tax eva­sion. At present, pro­sec­utors need only prove that organ­isa­tions lacked «reas­on­able» or «adequate» con­trols to pur­sue the offence in bribery and tax eva­sion cases. «It would be much more sens­ible for the gov­ern­ment to provide strong guid­ance for SMEs on what these pro­ce...
3 comments
Read more

Doubt on CS's collateral.

  Credit Suisse provided an emergency $140mn loan to Greensill Capital based partly on invoices to companies that deny ever doing the business stated on the documents. The Swiss bank provided the loan in October 2020, less than five months before the collapse of Greensill, a supply chain finance firm that counted former British prime minister David Cameron as a senior adviser. Invoices issued by metals magnate Sanjeev Gupta’s Liberty Commodities and sold to Greensill formed part of the collateral for the loan, according to documents seen by the Financial Times and people familiar with the transaction. Yet several of the parties named on the invoices have told the FT they did no business with Liberty. GFG has consistently denied any wrongdoing. Credit Suisse’s loan had a clause dictating that the collateral value had to be equal to or greater than the $140mn borrowed. The terms of the debt agreement only allowed invoices on Green-sill’s balance sheet to count towards this tally if t...
2 comments
Read more