18 October 2023 , 09:37
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The Society of Motor Manufacturers and Traders (SMMT) has warned that new post-Brexit rules could add £3,400 to the price of electric cars. They have urged the UK and EU to delay implementing stricter rules on EV batteries.
If these rules aren't postponed, a 10% tariff could be added to electric car exports between the UK and EU from January 1st. This would apply if less than 45% of their value is made in the UK or EU.
Car makers are finding it hard to meet this target as battery production in Europe hasn't grown as fast as expected. The SMMT reckons these tariffs could push up the average price of EU-made electric cars in the UK by £3,400.
Almost half (49%) of all electric cars bought in the UK come from the EU. The SMMT said petrol and diesel cars wouldn't face these tariffs, which could "have the perverse effect of incentivising the purchase of fossil fuel-powered vehicles".
They suggest a three-year delay to the new rules would be a sensible solution. This would give time for European battery production to increase.
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Mike Hawes, the chief executive of SMMT, spoke at a virtual global trade conference. He said: "UK automotive is a trading powerhouse delivering billions to the British economy, exporting vehicles and parts around the world, creating high value jobs and driving growth nationwide."
He also warned: "Our manufacturers have shown incredible resilience amid multiple challenges in recent years, but unnecessary, unworkable and ill-timed rules of origin will only serve to set back the recovery and disincentivise the very vehicles we want to sell."
Hawes added: "Not only would consumers be out of pocket, but the industrial competitiveness of the UK and continental industries would be undermined."
He suggested: "A three-year delay is a simple, common-sense solution which must be agreed urgently."
A Government spokesperson responded: "We need a joint UK-EU solution to avoid consumers facing tariffs on electric vehicles from 2024 which do not apply to petrol and diesel cars."
They continued: "We have raised this with the European Commission and industry and are ready to work with them to find a solution within the existing structure of the Trade and Cooperation Agreement. The UK remains one of the best locations in the world for automotive manufacturing."
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