UK buyers could end up paying more for European-built EVs from next year unless new rules around battery sourcing are changed.
The European Automobile Manufacturers Association (ACEA) has warned that 82% of new electric cars from Europe will be subject to a 10% import tariff under updated rules of origin (ROO) – a cost that manufacturers or dealers will have to absorb or pass on to customers.
The body has written to the European Commission warning that it cannot meet the requirements set out under the post-Brexit EU-UK Trade and Cooperation Agreement (TCA), and asking for a temporary delay.
It warns that if the rules come into effect as planned, the industry faces a “catastrophic” impact, including €147 billion in tariff costs in 2027 alone, and losing ground to Chinese newcomers.
Under the TCA, vehicles can be imported/exported between Europe and the UK without tariffs as long as a sufficient proportion of the components originate in the EU or UK.
From the start of 2027, the rules mean at least 55% of an EV’s value must originate in the UK or EU, 70% of its entire battery must be from one side or other, and 65% of battery cells.
The ACEA estimates that 82% of cars heading to the UK from Europe will not meet these requirements, an estimated 426,000 vehicles.
The rules were due to come into effect in 2024 but were pushed back after warnings that the industry was not ready.
In the letter, the ACEA says battery manufacturing in the EU is still not sufficiently developed. It warns: “Members from all manufacturing segments, passenger cars, vans, buses and heavy-duty trucks, agree that the rules for batteries foreseen in the TCA from January cannot be met.”
The trade body insists that its members are supportive of the ambition to bring more battery production to the EU and are investing in it but that the “full scale and capacity of these investments will only materialise in the coming years”.
It proposes a “bridge” of flexible rules between 2027 and 2030 to allow the industry to catch up, before more restrictive limits from 2030. It argues that such an approach reflects the pace and development of the EU battery industry and scale of manufacturer investment.
The rules also affect EVs build in the UK and exported to Europe and the ACEA noted that it perceives the UK to be “a willing partner” in considering further flexibilities.
