News Update


Electric vehicle regulations might cost automakers billions of dollars.

The restrictions are intended to ensure that EU-produced electric vehicles use mostly locally sourced parts.

However, manufacturers on both sides of the Channel claim they are not prepared.

The European Automobile Manufacturers Association (ACEA) warned that the measures could limit EU factory output by 480,000 automobiles.

Customers, they argued, will pay the price.

The fundamental issue is the implementation of so-called “rules of origin” in January. They apply to cross-Channel car shipments under the terms of the Brexit accord, the UK-EU Trade and Cooperation Agreement.

They will effectively ensure that batteries for electric vehicles must be manufactured in either the UK or the EU.

Vehicles that do not match the standards will be subject to a 10% tariff – or charge – when transported across the Channel in either direction.

The laws were enacted to defend European industry from low-cost imports.

Carmakers are failing to fulfill the new standards because battery production in Europe has not ramped up as swiftly as predicted.

It is a major issue for European manufacturing. With 1.2 million automobiles arriving at UK ports last year, the UK is by far their largest export market. Similarly, more cars made in the UK are shipped to the EU than any other region.

High tariffs could make producing electric vehicles more expensive, potentially raising pricing.

The ACEA wants the new standards postponed for three years and has asked the European Commission to intervene.

“Raising consumer prices for European electric vehicles at a time when we need to fight for market share against fierce international competition is not the right move,” said Renault CEO Luca de Meo, who also serves as ACEA president.

“We will effectively be handing over a chunk of the market to global manufacturers,” he continued.

Firms are nevertheless compelled to sell more electric vehicles.
In a turn toward green policy, the PM postpones the ban on gasoline cars.
An agreement between the UK and the EU would be required for the rules to be delayed.

Kemi Badenoch, the UK’s Business Secretary, indicated last week that she was “optimistic” such an agreement could be struck.

Thierry Breton, the EU’s internal market commissioner, was far less candid in an interview with the Guardian on Friday.

He stated that reopening the Brexit deal to appease the auto sector would be wrong.

“If something has been negotiated, it shouldn’t be changed,” he told the outlet.

Charging station for electric vehicles

According to the European Commission, “Brexit has changed the trade relationship between the UK and the EU, among other things.”

The EU-UK Trade and Cooperation Agreement, it said, “is the result of a negotiation in which both sides agreed to an overall balance of commitments.”

It went on to say that the rules of origin are intended to create a “strong and resilient battery value chain in the EU.”

The industry’s petitions were met with hostility, according to ACEA Secretary General Sigrid de Vries.

“When it comes to Brexit-related issues, it appears that the European Commission is unwilling to change anything.” “It’s a very sensitive political issue,” she told the BBC.

“We understand it, and we are not requesting any fundamental changes to these arrangements.”

Meanwhile, Mike Hawes, chief executive of the UK’s Society of Motor Manufacturers and Traders, told reporters last week that he believed an agreement would be reached, but that it may be a last-minute event.

“We remain optimistic that an agreement can be reached.” “It makes sense,” he remarked.

“But, as with Brexit, I can see this going down to Christmas Eve or something.”

This week, trade officials from the EU and the UK will meet in London. It is unclear whether the new guidelines will be included on the agenda.


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