The European Union is hesitant to accept Britain’s request to delay tariffs on the sale of electric vehicles (EVs), but the UK auto industry believes an agreement can still be reached, according to the Society of Motor Manufacturers and Traders (SMMT). Under the current Brexit trade deal, EV sales between Britain and the EU will incur 10% tariffs starting in January, unless 45% of the vehicle’s value comes from Britain or the EU, based on “rules of origin.” With many EV batteries being imported from China, these tariffs would negatively impact automakers in both the UK and the EU and potentially result in higher prices for consumers, undermining carbon emissions reduction efforts.
Several major car companies have expressed concerns that their British car plants will lose competitiveness if the tariffs are implemented. Stellantis, the owner of brands such as Vauxhall, Peugeot, Citroen, and Fiat, specifically stated that British car plants may close without a tariff delay. However, Brussels has shown reluctance to accept Britain’s plea, causing uncertainty about the French government’s stance on the issue. Recent reports suggest that Germany is in favor of a tariff waiver.
While acknowledging the nervousness in Brussels about reopening aspects of the Brexit deal, SMMT Chief Executive Mike Hawes emphasized that the issue at hand is solely about EVs and not a comprehensive renegotiation. The European Commission spokesperson stated that the Brexit deal was a balanced outcome of negotiations, but issues raised by either side could be examined by the bodies established in the deal.
Despite the challenges, the UK auto industry remains optimistic and believes that delaying the tariffs on EVs is in the best interest of all parties involved. The industry argues that it is counterproductive to impose additional tariffs on vehicles that they are actively promoting people to buy. If an agreement cannot be reached, carmakers are prepared to take measures to ensure their vehicles remain competitive despite the tariffs.
Sources:
– Reuters
– Society of Motor Manufacturers and Traders (SMMT)