European battery groups push to keep UK-EU EV tariff rules from 2027

Traders Union
All News
Financial News
EU battery groups push 2027 EV tariffs

Highlights

BASF and Umicore are lobbying the European Commission to uphold strict rules of origin for electric vehicle batteries from January 1, 2027, after a previous three-year delay.
Under the UK-EU Trade and Cooperation Agreement, 82 per cent of 520,000 electric vehicles projected for 2027, worth about £17.9 billion, risk 10 per cent tariffs due to reliance on Chinese materials.
Industry tensions over EU-made battery material requirements have delayed an early November EU-UK summit on trade relations, as UK and EU business groups seek more flexibility.

Battery materials dispute before 2027 deadline

As reported by the Financial Times, BASF and Umicore are lobbying the European Commission to enforce tougher rules of origin for electric vehicles from January 1, 2027, after a previous three-year postponement. The companies have invested millions of euros in European production of cathode active materials, a core battery component, and argue that changing the framework again would weaken the business case for those projects.

Umicore says Europe cannot call for a resilient battery value chain while removing a rule that supports demand for EU-made battery materials. BASF has also urged the Commission not to reopen the regime, warning that doing so would weaken demand for EU-produced cathode active materials and complicate future capacity expansion.

Under the UK-EU Trade and Cooperation Agreement, non-EU or UK materials from next year can account for no more than 35 per cent of the value of battery cells and 30 per cent of battery packs. Electric vehicles that do not meet those thresholds face tariffs of 10 per cent when traded between the UK and the EU.

Industry impact on carmakers and EU-UK trade

Carmakers are pushing in the opposite direction. In a letter seen by the Financial Times, the European Automobile Manufacturers’ Association warns that reliance on Chinese batteries and raw materials means most vehicles would fail the post-Brexit test, with about 82 per cent of the 520,000 electric passenger cars and vans that EU producers expect to sell in 2027 at risk, representing about £17.9 billion in value.

China produces 85 per cent of the world’s cathode active materials, according to the International Energy Agency, while many electric vehicles assembled in the EU and the UK still depend on Chinese batteries and inputs. A Commission official says another postponement would damage the EU’s credibility, while chemicals industry group Cefic argues that European supply exists and that companies should follow the agreed framework.

The row also feeds into a wider dispute over the EU’s Made in Europe agenda and the place of UK companies in future supply chains. Tensions over that issue have contributed to the delay of an early November summit meant to reinforce the EU-UK reset in trading relations, while chambers of commerce from the UK and six EU industrial powers this week call for greater flexibility toward British industry.

Our previous report on the rebound in UK vehicle production highlighted that output rose in August as domestic demand improved, even as exports to the EU softened. The piece also noted the industry’s warning that proposed EU “Made in Europe” rules could threaten the UK auto sector’s long-term outlook despite more than £1 billion in fresh investment commitments from major carmakers.

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.