EU agrees 3-year delay on imposition of post-Brexit tariffs for UK electric cars
Thu 21 December 2023
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The European Council has approved a last minute deal which means that the introduction of tariffs on electric vehicles traded between the EU and UK will be delayed for three years. The motor industry on both sides of the channel had argued that they weren't ready for the imposition of new rules planned to be introduced in January 2024.
The European Commission had initially rejected the idea of delaying the rules, despite pleas from industry and the UK Government.
The Society of Motor Manufacturers and Traders (SMMT) had warned that battery electric vehicles (BEVs) made in the EU could have been hit with a £3,400 tax hike when sold in the UK if new rules of origin were implemented next month.
The UK-EU Trade and Cooperation Agreement (TCA) temporarily exempted electric vehicles from the rules that said products must be substantially made in Britain or the bloc to qualify for the EU’s zero tariff, zero quota regime, because EV batteries are predominantly imported from Asia.
If the change were to have gone ahead in January as originally planned, EVs traded both ways would have been subject to a 10% tariff – adding billions of pounds in costs, pushing up prices for consumers, and making EV exports traded in either direction uncompetitive in each other’s markets.
Mike Hawes, SMMT's Chief Executive, described the decision as: "a win for motorists, the economy and the environment".
He added: "Maintaining tariff-free trade in EVs will ensure consumers retain the widest and most affordable choice of models, at a time when we need all drivers to make the switch."
Image courtesy Michael Marais, Unsplash
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