According to a report in the Financial Times, Europe’s carmakers are calling for a delay to an EU rule change that could hit shipments of electric vehicles from the UK to the EU’s single market with new import tariffs of 10%.
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The FT cited a letter that it has seen from Europe’s carmakers which warns of the adverse consequences of new ‘Made in Europe’ rules which will define what vehicles qualify as European-made from next year (1 January).
The European Union is drawing up plans under its ‘Industrial Accelerator Act’ that would benefit manufacturers producing vehicles within Europe.
The letter reportedly says that dependence on China for key EV components (particularly EV batteries) remains for many European OEMs, including those in the EU as well as in the UK.
A major problem is that the UK is outside of the EU’s single market, so most UK-made EVs would not qualify as European under the new rules and would therefore immediately attract an EU 10% import tariff levy.
The EU and UK governments had already agreed to postpone the tougher requirements from 2024 to 2027, with manufacturers successfully arguing that the delay would allow them to meet the tighter rules of origin.
However, they are still largely not able to meet the stricter rules as the European EV supply chain has not developed as previously hoped for.
The FT said the ACEA letter proposes another delay – to 2030 – to the rules for batteries and battery packs, so that the European supply chain can develop.
Otherwise, ACEA warns that Europe’s auto industry would be hit by direct tariff costs and an adverse competitive impact, as well as a new hindrance to developing a viable EV supply chain in Europe.
The debate over the new EU ‘Made in Europe’ rules come as Europe’s auto industry struggles to compete with Chinese EV makers and is intended to help the competitive position of European companies.
