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

US FED rate rise.

  The US Federal Reserve officials have indicated that they plan to resume increasing interest rates to control inflation in the world's biggest economy. During the June meeting, the Federal Open Market Committee reached a consensus to keep interest rates stable for the time being to evaluate whether further tightening of policy would be necessary. However, the majority of the committee anticipates that additional rate increases will be required in the future. The minutes of the meeting have recently been made public. According to the minutes, most participants believed maintaining the federal funds rate at 5 to 5.25 per cent was appropriate or acceptable, despite some individuals wanting to raise the acceleration due to slow progress in cooling inflation. Although Fed forecasts predicted a mild recession starting later in the year, policymakers faced challenges in interpreting data that showed a tight job market and only slight improvements in inflation. Additionally, officials gr...
Post a Comment
Read more

EU business slide.

  S&P Global’s flash eurozone composite purchasing managers’ index, a key gauge of business conditions for the manufacturing and services sector, fell 1 point to 47.1, figures showed yesterday. That is its lowest level since November 2020 and the fourth consecutive month below the crucial 50 mark separating growth from contraction. One of the few bright spots in the survey was that companies in all sectors reported a slight easing of cost pressures, price growth and supply chain constraints. However, prices charged for goods and services still rose at the sixth fastest rate since such data started in 2002. Jobs growth increased marginally from October but remained low compared with the past 18 months. Following a few months of falling price pressure in manufacturing and services, the October print shows an overall stabilisation said Jens Eisenschmidt, chief European economist at Morgan Stanley. However, German businesses, at the hub of Europe’s energy crisis, reported that manu...
1 comment
Read more

India- UK trade deal.

  According to India's top trade official, talks with the UK regarding a trade agreement are progressing well, despite obstacles related to temporary work visas and the opening up industries like automotive and spirits. The Commerce and Industry Minister, Piyush Goyal, explained that India is seeking transition periods or greater market access in specific sectors due to its economy, which is slightly larger than the UK's and expected to outgrow it in the coming decades. If a trade deal is reached, it would be one of the most significant agreements for Britain since leaving the EU, and it would also be necessary for India, which surpassed the UK as the fifth-largest economy last year. Goyal stated that India aims to increase its economy from $3.5tn to $35tn by 2047, the country's centenary of independence. According to officials and diplomats in India, talks about a proposed trade deal may be finished by early September, just in time for the G20 summit in New Delhi. Nigel Hu...
Post a Comment
Read more