Car makers plead with EU to delay ‘cliff edge’ trade rules

London, Jun. 27, (PA Media/dpa/GNA) – UK car makers have pleaded with the European Union to delay new post-Brexit trade rules which they claim will disproportionately affect electric vehicles.

The Society of Motor Manufacturers and Traders (SMMT) said rules of origin provisions due to come into force at the start of next year will lead to tariffs on exports of UK-built cars, particularly electric models.

It called for the 2024 rule to be scrapped to allow more discussions on the issue to take place, with tougher requirements scheduled from 2027.

SMMT chief executive Mike Hawes told a central London conference attended by international automotive manufacturers and investors: “The rules of origin get tougher, especially for batteries and their contents, from January 1 2024.

“We’re saying basically suspend that requirement and just let the regulation that’s currently in place float through to 2027, which is the next threshold.”

He went on: “January 1 2024 is our cliff edge. We need to make sure that those aren’t applied (or) else there’s the real potential that EVs are more expensive and face the tariff, whereas petrol and diesel equivalents do not.”

Asked about progress in discussions between the UK and the EU over a delay, Hawes said: “It’s with Brussels. We’ve had discussions with government, they’re fully supportive. They recognise the negative impact this will have on cross-border trade, going both directions.

“It is obviously for the Commission to agree that something needs to be done – in other words, the relaxation of the tougher rules of origin that come in on January 1.

“We know they’ve been talking to manufacturers, trying to understand the scale of the impact that would happen to European manufacturers.”

He added: “Our fear is obviously this takes too long. We can’t afford to have a last-minute December 31 agreement because business needs to plan, it needs to plan its volumes, and to plan your volumes you need to know the cost that you’re going to have to bear in putting those vehicles on the market.”

Tariffs of 10% are due to be imposed on exports of electric cars between the UK and the EU from next year if at least 45% of their value does not originate in the UK or EU.

British shadow transport secretary Louise Haigh will use a speech at the conference to demand that the government takes action over the issue.

She will say: “Labour are urging the government to prioritize an agreement with the European Union to ensure manufacturers have time to prepare to meet rules of origin requirements and make Brexit work for them.

“But let’s be clear: it’s the Government’s own failures that have made securing a deal necessary.

“They have had years and years to ramp up the UK’s battery capacity and have failed.

“And while the Conservatives stand back, Labour in government will turbocharge the transition to electric vehicles and create the conditions for our proud car industry to not just survive the enormous upheaval of the decade ahead, but thrive.”

GNA

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