EU proposes three-year delay before tariffs hit EV trade with UK

THE European Union proposed delaying by three years tariffs on electric vehicles traded with the UK that are set to kick in on Jan 1, in a win for carmakers that warned the rules would unnecessarily hurt their operations.

“This is a one-off extension that will not be possible in the future,” Maros Sefcovic, the EU chief for post-Brexit relations with the UK, told reporters on Wednesday (Dec 6).

Under current post-Brexit arrangements to be phased in from Jan 1, EVs moving between the UK and the European Union would draw a 10 per cent duty if less than 45 per cent of their value comes from the region, with the policy meant to encourage development of Europe’s battery supply chain.

But carmakers, the UK and the vast majority of EU member states had been pushing to delay the measure until 2027 because local cell supply isn’t ready. France has long resisted a straightforward extension, preferring instead alternatives to mitigate the impact of the tariffs on the industry. Paris had signalled in recent weeks that it was open to finding a flexible solution.

“This balanced proposal provides much-needed predictability and stability to EU car and battery makers at a time of fierce global competitive pressure,” Valdis Dombrovskis, the EU’s trade chief, said in a statement on Wednesday. “It is the result of intense engagement with industry across the entire EV supply chain and with trade unions, which had expressed concern about rules that would have seen tariff barriers hit our EV exports to the UK, our largest export market.

The recommendation for a three-year delay needs to be approved by EU capitals first, and then followed by a joint decision with the British government. BLOOMBERG