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Electric Vehicle Tariff Planned On Exports To UK - Infographics

Photo by Michael Marais / Unsplash

The European Automobile Manufacturers’ Association (ACEA) has called on the European Commission to postpone a 10% “rules of origin” tariff on EU electric vehicle exports to the UK.

Under the EU-UK post-Brexit trade deal, EVs need to have 45% EU or UK content from January 2024, with a 50%-60% requirement for their batteries, or face British or EU import tariffs of 10%.

Under the terms of the EU free-trade agreement, exports must comply with “rules of origin” (RoO) to obtain tariff preferences.

“Driving up consumer prices of European electric vehicles, at the very time when we need to fight for market share in the face of fierce international competition, is not the right move -- neither from a business nor an environmental perspective,” stated Luca de Meo, ACEA President and CEO of Renault Group. “We will effectively be handing a chunk of the market to global manufacturers.”

The ACEA has said the rules could cost carmakers up to €4.3 billion ($4.57 billion) in tariffs over the next three years, potentially reducing electric vehicle production by some 480,000 units -- the equivalent output of two average-size auto factories.

So far, the European Commission has been reluctant to renegotiate the RoO deal.

“There is a straightforward solution: extend the current phase-in period for battery rules by three years. We urge the Commission to do the right thing,” added de Meo.