Puzzle with printed EU and UK flags is seen in this illustration taken Nov 13, 2019. REUTERS/Dado Ruvic/Illustration/File photo
The European Union and Britain are facing an urging need to delay regulations for electric vehicles (EVs) traded between the two, as these rules would trigger a 10 percent tariff, warned Europe’s car industry group on Monday.
In a statement prior to a planned trade meeting between EU and UK officials, Luca de Meo, the European Automobile Manufacturers’ Association (ACEA) president and Renault CEO, emphasized that increasing consumer prices of European EVs at a time of intense international competition would be detrimental.
According to the EU-UK post-Brexit trade deal, EVs must have a minimum of 45 percent EU or UK content from 2024. Additionally, their battery cells and packs must meet a requirement of 50-60 percent, or else they will incur 10 percent import tariffs from either the UK or EU.
However, both British and EU automakers have not adequately developed their EV supply chains to meet these requirements and have called for a postponement until 2027.
Stellantis has warned that British car plants will shut down, resulting in significant job losses, unless the Brexit deal is promptly renegotiated. Similarly, Ford has announced a slowdown in the transition to electric vehicles.
The ACEA has estimated that these regulations could cost car manufacturers up to 4.3 billion euros ($4.57 billion) in tariffs and negatively impact production.
So far, the EU executive has been reluctant to renegotiate the deal. Stefan Fuehring, a European Commission official responsible for overseeing the post-Brexit EU-UK trade agreement, stated in June that the EU rules of origin were deemed suitable and that no changes were being considered.
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