EU Reticent on Postponing Tariffs on Electric Vehicle Sales, But Automakers Remain Optimistic

The European Union is hesitant to agree to Britain’s request for a postponement of tariffs on the sale of electric vehicles (EVs), but automakers in the UK remain optimistic that a delay can be arranged, according to the UK’s SMMT industry association.

Under the current Brexit trade deal, EV sales between Britain and the EU will incur a 10 percent tariff starting in January, unless 45 percent of the vehicle’s value comes from Britain or the EU, based on “rules of origin.” This poses a significant challenge for automakers as many EV batteries are imported from China. The introduction of tariffs could result in increased EV prices for consumers, potentially impeding efforts to reduce carbon emissions.

Major car companies have warned that their British car plants would become uncompetitive if the tariffs are implemented. Stellantis, for instance, has stated that British car plants will be forced to close if a deal is not reached.

While the SMMT CEO, Mike Hawes, acknowledged some reluctance or nervousness from Brussels regarding Britain’s plea for a tariff postponement until 2027, he expressed optimism that an agreement could be reached. The stance of the French government on the issue remains unclear, with recent reports suggesting that Germany is in favor of a tariff waiver.

Hawes acknowledged the concerns about reopening aspects of the Brexit deal and the potential implications. However, he emphasized that the request for a postponement solely pertained to EVs and not the entire deal.

The European Commission spokesperson highlighted that the Brexit deal was the result of negotiated commitments between Britain and the EU, but indicated that issues raised by either side could be examined through the mechanisms established in the agreement.

In the absence of an agreement, automakers are prepared to take steps to ensure that their vehicles remain competitive despite the tariffs. Hawes expressed optimism during a press briefing, stating that it would be logical to avoid imposing additional tariffs on the very vehicles that are being encouraged for purchase.

Overall, while the EU’s stance is unclear at this point, the UK automotive industry remains hopeful that a postponement of tariffs on EV sales can be achieved for the benefit of both consumers and automakers alike.

– EVs: Electric Vehicles
– SMMT: Society of Motor Manufacturers and Traders

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