European carmakers seek delay to EU-UK EV tariff rules

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EU-UK EV tariff delay

Highlights

European Automobile Manufacturers Association warns most EVs sold UK-EU post-January 2027 will face tariffs due to Chinese battery reliance.
ACEA proposes delaying battery pack assembly requirements to 2030 and originating cathode material rules to 2032, citing slow EV adoption and local production setbacks.
82 percent of EU EV exports to UK in 2027, worth €17.9bn, could be tariffed under current rules, risking competitiveness and deterring investment.

Industry warning over 2027 origin rules

As reported by the Financial Times, the European Automobile Manufacturers Association has told the European Commission that most electric vehicles sold between the UK and the continent would not qualify as European-made under the stricter regime now due to take effect on January 1. In a letter seen by the newspaper, the group says dependence on Chinese batteries and raw materials means a large share of vehicles would face tariffs unless the timetable changes.

Brussels and London had already agreed to delay the tougher requirements from 2024 to 2027, with the original pause intended to give manufacturers time to build compliant supply chains. Carmakers now argue that electric-vehicle adoption has been slower than expected, while battery production capacity in Europe has taken longer to develop after setbacks including the collapse of Sweden's Northvolt and broader scaling challenges among regional producers.

ACEA proposes a phased approach over five years. It says the battery pack assembly requirement should be postponed until 2030, while the added requirement for originating cathode material should be delayed until 2032.

Trade and competitiveness risks for Europe

According to the industry estimates in the letter, about 82 per cent of the 520,000 EV passenger cars and vans that EU producers expect to sell in the UK in 2027, worth €17.9bn, would be caught by the rules and become subject to the tariff. The association warns that beyond the direct duty cost, the measure could cause lasting damage to members' competitiveness in their largest export market.

The UK industry is also backing a delay, reflecting similar concerns over exports from Britain to the EU. Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders, says neither side can afford policies that raise costs, deter investment or reduce consumer choice at a time of intense global competition.

The pressure comes as UK manufacturing is already facing uncertainty over whether cars built in Britain would fully qualify for Brussels' new Made in Europe subsidies. The European Commission and the UK government do not immediately comment.

Our earlier coverage of European carmakers’ call to delay tighter UK-EU post-Brexit rules of origin for EVs explained that the industry fears many models will fail to qualify as European-made and be hit with 10% tariffs from January 1 under the current timetable. We noted ACEA’s proposal for a phased rollout—pushing battery pack assembly rules to 2030 and cathode-origin requirements to 2032—arguing that slow EV adoption and lagging European battery supply chains are making compliance unrealistic.

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