The European Commission is proposing a three-year delay to the implemetation of its post-Brexit 10% electric vehicle tariffs, throwing a lifeline to EV and battery manufacturers and those employed in the UK in these sectors.
Announcing its decision today (6 December) the European Commission said that it had removed the threat of tariffs on the export of EU electric vehicles to the UK, and vice versa, which was due to kick in on 1 January 2024.
The move comes after the EU was warned that the tariff, known as Rules of Origin and due to come into effect next month, would have damaged the industry on both sides of the Channel. The Brexit trade deal struck in 2020 exempted electric vehicles from the tax for three years and was due to end this January.
However the commission is warning that this is a temporary reprieve and emphasised that in 2027 it will ”pass into the strictest level of rules of origin, as always foreseen in the Trade and Cooperation Agreement.
It added: ”This is a one-off extension that will not be possible again in the near future. In fact, our proposal includes a lock-in mechanism that makes it legally impossible for the EU-UK Partnership Council to change the rules again before 2032.”
The move allows British car manufacturers to evade Brexit tariffs on electric vehicle exports to the EU for the next three years. The news comes just days after SMMT figures on BEV registrations showed a fall of almost a fifth last month.
The proposal now has to be ratified by member states.
Commenting on the proposal Jon Lawes, managing director at Novuna Vehicle Solutions and MHC Mobility, said: ”If approved this breakthrough is a lifeline for the UK and European motor industry.
”The Rules of Origin tariffs have cast a long shadow over the switch to EVs in the UK and Europe. With UK EV registrations declining in November, the rules threatened to further hit vehicle production costs and dampen EV adoption.
“With the New Year’s cliff edge averted, the industry and policymakers on both sides of the Channel need to focus on scaling up domestic battery capacity and tackling the persistent charging infrastructure deficit to create a sustainable, competitive market for EVs.
