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Tariffs on UK electric cars.

 

The European Commission has confirmed that it will continue with its plan to impose tariffs on electric cars exported between the UK and EU starting next year. This is due to the "rules of origin" requirement that mandates EVs traded across the English Channel to have 60% of their battery and 45% of their parts sourced from the EU or UK or face a 10% tariff. A senior Commission official, Richard Szostak, recently informed parliamentarians from the UK and EU that the bloc's battery investment has significantly declined, making the tariffs necessary to encourage domestic production. In 2022, the EU's share of global investment in battery production shrank from 41% to only 2% after the US offered substantial subsidies through its Inflation Reduction Act.


Starting in 2024, car manufacturers in the UK will need to have 22% of their sales come from zero-emission vehicles, which means they may need to import EVs from the continent to meet this requirement. If EU carmakers face 10% tariffs on their EVs, they could lose market share in the UK. Chinese-made vehicles already pay these tariffs but can still compete with EU-made EVs because they have lower starting prices. The Society of Motor Manufacturers and Traders in the UK has warned that tariffs on EU imports could slow the sale of EVs in the country because it would increase prices for consumers.

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