EU Reticent About Postponing Tariffs on Electric Vehicles, Automakers Remain Hopeful

The European Union is hesitant to agree to Britain’s request to postpone tariffs on the sale of electric vehicles (EVs), but carmakers in both Britain and the EU remain optimistic that a delay can be reached, according to Britain’s Society of Motor Manufacturers and Traders (SMMT).

Under the current Brexit trade deal, starting from January, the sale of EVs between Britain and the EU will be subject to 10% tariffs unless 45% of the vehicle’s value originates from either Britain or the EU according to the “rules of origin”. This poses a challenge for automakers as many EV batteries are imported from China, thereby subjecting both British and EU car manufacturers to the tariffs. Such tariffs could potentially result in higher EV prices for consumers, which would hinder efforts to reduce carbon emissions.

Several major car companies have raised concerns that their British car plants will become uncompetitive if the tariffs come into effect. Stellantis, the world’s third-largest carmaker and owner of well-known brands such as Vauxhall, Peugeot, Citroen, and Fiat, has even stated that it may have to close British car plants if an agreement is not reached.

Speaking on the matter, SMMT Chief Executive Mike Hawes noted that the European Union has shown some hesitation in accepting Britain’s plea for a tariff postponement. He also mentioned that the French government’s stance on the issue remains uncertain, despite reports stating that Germany is in favor of a tariff waiver. Hawes acknowledged that there may be concerns about reopening certain aspects of the Brexit deal negotiated between Britain and the EU, but emphasized that the request for a tariff delay solely pertained to EVs.

In response to queries, a spokesperson for the European Commission stated that the Brexit deal reflects the overall balance of commitments agreed upon in negotiations between Britain and the EU. However, any concerns raised by either party could be examined by bodies established through the deal.

Hawes assured that if an agreement cannot be reached, carmakers will work to prevent their vehicles from becoming uncompetitive due to tariffs. He also expressed optimism that a resolution will be reached, citing the common sense in not imposing additional tariffs on the very vehicles the industry is encouraging people to purchase.

Overall, while the European Union is cautious about agreeing to a postponement, the auto industry remains hopeful that a compromise can be found to avoid the potential negative impact of tariffs on the sale of electric vehicles.

1. Electric Vehicles (EVs): Vehicles that are powered by one or more electric motors, using electrical energy stored in rechargeable batteries.
2. Tariffs: Taxes or duties imposed on imported goods.

– Sachin Ravikumar, Reuters correspondent in London, covering general news from the UK and with expertise in running breaking news teams and reporting on business and general news from India.
– Society of Motor Manufacturers and Traders (SMMT): The UK’s leading automotive industry association representing car manufacturers and traders.
– European Commission: The executive branch of the European Union responsible for proposing legislation and implementing decisions.

Original source: “EU reticent about postponing EV tariffs, UK carmakers hopeful: SMMT” by Sachin Ravikumar, Reuters