If the European Union pushes through with the latest amendments to its existing trade regulations, it could mean a potential nosedive for electric vehicle (EV) companies in the United Kingdom.
Under amended regulations, any EVs exported by British manufacturers into the EU are required to meet stricter rules of origin by early 2024. This means that the batteries for such vehicles need to come from either the UK or an EU member country; otherwise, British EV makers will need to pay an additional 10% in tariffs.
This poses a serious issue as the greater number of British and European EV manufacturers still use batteries produced in Asia.
Stunting an Industry’s Growth
For Society of Motor Manufacturers and Traders (SMMT) chief executive Mike Hawes, recent developments in the global EV industry offer the British EV sector tremendous potential for growth. However, putting UK EVs under harsher tariffs is seen as a potential stumbling block to further development.
Hawes and his peers are in the process of asking relevant authorities to suspend the proposed requirements and to maintain status quo with current regulations until 2027.
It was further pointed out that the EU needs to make sure that such tariffs are not applied. If not, it is possible that the price of EVs, already expensive items compared to petroleum-fueled vehicles, could go higher because of the tariffs.
Hawes went on to say that British EV makers can’t hinge their hopes on a last-minute agreement at the end of the year as these need to plan their production and distribution volumes for 2024 as early as now.
That said, the SMMT recently called upon British political parties to devise a strategy that will establish the conditions wherein production of battery-powered EVs can increase tenfold to over 750,000 units by the end of the current decade in the face of a growing number of global competitors.