Boost For UK Electric Car Industry As EU Postpones Tariffs 

The European Union has proposed a delay on tariffs for electric vehicles produced in the United Kingdom which marks a significant shift in EU-UK post-Brexit relations.

The delay on the tariffs, which were originally scheduled for January 1, 2024, is seen as a major boost for the UK’s growing electric vehicle industry and Europe, writes La Informacion.

On Wednesday, December 6, Maros Sefcovic, the EU’s head of post-Brexit relations with the UK, announced the proposal. This delay would extend for three years, providing a much-needed respite for automoblie. manufacturers.

Sefcovic emphasized, ‘This is a one-off extension that will not be possible in the future.’ The proposed amendment targets only the electric vehicle sector and is not part of a broader renegotiation of the EU-UK Trade and Cooperation Agreement.

Boosting The European Battery Industry

In parallel, the EU executive branch has committed to a substantial funding initiative. They plan to allocate up to €3 billion over the next three years to bolster European battery manufacturers.

Sefcovic highlighted the potential benefits: ‘This new instrument will provide support, possibly as a fixed bonus, to European manufacturers of more sustainable batteries, creating important secondary effects throughout the value chain.’

Under the existing post-Brexit agreements, electric vehicles traded between the UK and EU would face a 10 per cent tariff if less than 45 per cent of their value originated from outside the EU. This policy aims to foster Europe’s battery supply chain, which is progressing slower than anticipated.

The Path To Agreement

Despite the slow progress, carmakers, the UK, and most EU member states had advocated for this delay until 2027, acknowledging that the local supply chain is not yet prepared. France, initially resistant to a direct extension, recently indicated a willingness to seek a flexible solution.

Valdis Dombrovskis, the EU’s trade chief, reflected on the importance of this decision: ‘This balanced proposal provides much-needed predictability and stability to EU car and battery manufacturers at a time of fierce global competitive pressure.’

He recognised the collaborative efforts with the industry and unions to avoid detrimental tariff barriers on electric vehicle exports to the UK, the EU’s largest export market.

Industry And Environmental Implications

The recommendation for a three-year delay must gain approval from the European Council and then reach an agreement with the British government. Swedish electric vehicle battery manufacturer Northvolt AB lauded the proposal.

Anders Thor, Vice President of company communications, commented via email, ‘If used correctly, this mechanism could further boost the race towards creating more sustainable and circular batteries, giving Europe a competitive advantage and moving towards realizing the goals of the Paris Agreement.’

European carmakers have urged EU member states for swift approval, highlighting the benefits for jobs and consumers. The approval is crucial for maintaining demand for European batteries and materials.