Urgent Post-Brexit Deal Needed to Avert £3,400 Price Hike on EU-made EVs in UK!
As the clock ticks down to the 1 January introduction of stricter ‘rules of origin’, the Society of Motor Manufacturers and Traders (SMMT) is raising a red flag, urging the EU and UK to strike an immediate deal to delay tariffs and prevent a potential £3,400 average price increase on battery electric vehicles (BEVs) for UK fleets.
These stringent rules were established under the EU-UK Brexit deal to promote local sourcing of battery parts and raw materials.
However, they are set to become more demanding from 2024, potentially impacting the affordability and competitiveness of EVs, as manufacturers in both regions are struggling to meet the stricter targets.
The current thresholds require 30% of batteries and 40% of BEV content to originate from the EU or UK.
But from 1 January 2024, these thresholds rise to 50-60% for batteries and 45% for the vehicle, with potential 10% tariffs for those not meeting these requirements when traded across the Channel.
This translates to a combined cost of £4.3 billion.
For consumers, including fleets, this could lead to an average £3,400 price increase on EU-manufactured BEVs bought in the UK and a £3,600 rise on UK-made BEVs sold in Europe.
The percentages will increase further from 2027.
These rules may inadvertently incentivize the purchase of fossil fuel-powered vehicles, jeopardizing EV competitiveness and net-zero ambitions.
Both the SMMT in the UK and the European Automobile Manufacturers’ Association (ACEA) have already sought delays due to the practical impossibility of meeting these requirements.
The SMMT is emphasizing the need for an immediate EU-UK agreement to prevent this crisis, proposing a pragmatic three-year delay to accommodate gigafactories and supply chain development.
This could be achieved within the existing EU-UK Trade Cooperation Agreement (TCA) framework, avoiding formal renegotiation.
Mike Hawes, SMMT Chief Executive, stressed the importance of resolving this issue urgently to maintain industrial competitiveness and drive EV adoption.
#TradeTariffs #SustainableMobility #EVCompetitiveness
Source: https://fleetworld.co.uk/electric-vehicles-face-3400-price-hike-without-urgent-eu-uk-deal/
