Electric vehicle manufacturers could face a hefty £3.7bn bill in the next three years if the EU implements tariffs on trade between the bloc and Britain. Industry leaders have warned that factories may need to reduce production by up to 480,000 vehicles during this period unless the so-called “rules of origin” regulations are abandoned. The European Automobile Manufacturers’ Association (ACEA) explains that these rules, set to come into effect in January, require car companies to use parts sourced from the UK or the EU when building vehicles to avoid a 10% tariff. Nevertheless, manufacturers heavily rely on components from markets like China, and ACEA argues that complying with the EU rules will be nearly impossible. ACEA President and Renault Group CEO, Luca de Meo, asserts that raising consumer prices of European electric vehicles at a time of intense international competition is detrimental to both the industry and the environment. He argues that supporting the industry’s transition to net-zero, rather than hindering it, is the way forward.
“We will effectively be handing a substantial portion of the market to global manufacturers,” said de Meo. “Europe should be championing its industry in the net-zero transition, as other regions do, rather than impeding it.”
5 things to start your day
1) Britain’s decelerating economy has resulted in a £1,400 loss for families – The Resolution Foundation claims that Britain is stumbling “from one major crisis to the next.”
2) BT to prioritize job cuts in rural areas to promote diversity – The company’s cost-cutting measures prioritize investment in city centers.
3) Wealthy savers could gain tens of thousands of pounds through Isa reform – Jeremy Hunt is considering overhauling the current savings system to boost investment.
4) Car dealer Pendragon faces fraud accusations related to its software business – The £260m lawsuit comes during a turbulent time for the British automotive industry.
5) Irish start-up plans the UK’s pioneering drone delivery service – Manna’s launch is expected to initiate a race among tech companies to provide air delivery.
What occurred overnight
Most Asian shares declined, with Tokyo being the only major regional market that saw gains, following Wall Street’s worst week in six months.
Investor sentiment was negatively affected by concerns about China’s property sector, the US government shutdown, and the prolonged strike by American autoworkers.
Troubled property developer China Evergrande plummeted by 18.2% after announcing its inability to secure further debt, which threatens its plans for restructuring its debt that totals over $300 billion.
The Hang Seng index in Hong Kong lost 1.5% and the Shanghai Composite index declined by 0.5%. Meanwhile, Tokyo stocks rebounded following significant losses in the previous week, with the Nikkei 225 index rising by 0.9% and the Topix index increasing by 0.4%. In Seoul, the Kospi dropped by 0.5%, and Australia’s S&P/ASX 200 fell by 0.1%.
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