The car industry is sounding the alarm as it pushes for a further delay in introducing Brexit-era tariffs on imported electric vehicles (EVs). A report reveals that EU officials are considering revising the 2020 trade deal, which included provisions to boost local battery manufacturing capabilities. However, industry insiders claim they won't meet the stringent conditions set for tariff-free sales of EVs from January 1, 2027.
The original trade agreement incorporated clauses designed to stimulate the development of regional battery production. Yet, manufacturers warn that they're struggling to establish supply chains necessary for local battery production within the designated timeframe. The industry's plea marks a renewed effort to delay the tariffs, which were initially set to be introduced in 2024 but postponed by three years following intense lobbying.
The underlying issue lies with the slower-than-anticipated establishment of 'gigafactories' – large-scale battery production facilities – within both the UK and EU. This has proven to be a complex and capital-intensive undertaking, leaving carmakers reliant on imports from Asia, which would then incur tariffs.
Imposing tariffs on EVs could lead to higher prices for consumers, potentially hindering their adoption at a critical juncture in climate change targets. Both the UK and EU have ambitious plans to transition away from petrol and diesel cars, making an increase in EV costs less accessible to a broader market.
The industry's plea highlights ongoing challenges adapting to post-Brexit trade rules and significant investment required to transform the automotive supply chain. The Commission must now weigh industry concerns against the original policy objective of fostering regional battery production and reducing reliance on external suppliers.