UK’s Electric Car Industry At Risk Prompts UK-EU Trade War

New Rules Could Impact UK E-Car Industry

Possible post Brexit trade war. Credit: Donfiore/

A new trade war between The UK and the EU is brewing, with Britain’s electric car industry lined up to be one of the casualties.

January 2024 is a fast-approaching deadline that could cause serious consequences for the companies on both sides of the channel unless an agreement can be reached, according to The Daily Express, Tuesday, July 04.

Brexit Deadline Looming

The UK’s Business and Trade Secretary, Kemi Badenoch, is lobbying the EU in an effort to be flexible in the view of new Brexit rules that will come into effect at the beginning of next year.

The UK’s Conservative Government has been warned that a post-Brexit ‘cliff edge,’ which will pose a threat to the UK’s electric car industry.

The Society of Motor Manufacturers and Traders (SMMT) has called for the UK Government to make a deal with the EU to extend the deadline by another three years.

They have highlighted the new rules of origin, which will require manufacturers to build more batteries in the UK, something they warn is an ‘existential threat’ to their businesses.

Currently, most Electric Vehicle batteries are supplied by China. But as of next year, a new rule will come into play which as part of the Brexit deal. The changes state that 45 per cent of an electric car’s value should originate in the UK or EU to qualify for trade without tariffs.

It is understood that negotiations are already taking place between the UK and the EU. This comes after concerns were raised from car manufacturers on both sides of the channel, that the new legislation will cause serious problems for cross-channel sales and production.

E-Car Industry Highlights Threat

Mike Hawes, chief executive of the SMMT said: ‘There is huge potential for growth, and that growth is now at risk from tariffs.’

Speaking at the organisation’s annual conference he added: ‘We’re saying basically suspend that requirement, and just let the regulation that’s currently in place flow through to 2027, which is the next threshold.

‘We can’t afford to have a last minute, 31 December agreement, because business needs to plan its volumes.’

Business Secretary, Ms Badenoch said that she had ‘heard very loud and clear the issues on rules of origin’ and confirmed that she would be taking the matter up with Brussels.

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Written by

John Ensor

Originally from Doncaster, Yorkshire, John now lives in Galicia, Northern Spain with his wife Nina. He is passionate about news, music, cycling and animals.