Automotive industry asks governments to swerve EV cliff-edge

At the end of 2023, rules of origin for electric vehicle batteries are set to change, which would subject sales of EVs from the UK to the EU and vice versa to a 10 per cent tariff.

This would push up costs for consumers and render manufacturers uncompetitive. It could, according to the Society for Motor Manufacturers and Traders, add billions of pounds in costs, and severely undermine the transition to net zero. 

Last week, after months of industry lobbying, the European Commission proposed extending the current rules until 2027 under the Trade Cooperation Agreement put in place after Brexit, which would enable the UK and EU auto industries to continue to sell EVs into each other's markets. The UK auto industry is now urging government across Europe to back that proposal urgently. 

"Adopting the Commission’s proposal would be a pragmatic solution, safeguarding the future of the EU and UK automotive industries, supporting motorists, the economy and the environment," said Mike Hawes, SMMT chief executive in a statement last week. "Such an extension would avoid damaging tariffs on the very vehicles we need consumers to buy, allow UK and EU manufacturers to compete with the rest of the world and, crucially, give the European battery industry time to catch up. Above all, voting for the proposal will enable us all to cut carbon emissions while supporting growth and jobs across the entire EV supply chain. We urge every party to get behind it."

The proposal will be voted on by European parliament members before going to the British government, which is believed to support an extension to the arrangement.

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