That’s the warning from carmakers, after EU rules on manufacturing are set to change in two years
Carmakers have warned that in two years’ time the price of electric vehicles (EVs) across the UK and Europe could rise by 10% or more.
This is due to tariff exemptions not being extended by Brussels, as part of the Brexit trade deal.
The exemption saw EVs made in Europe or Britain qualify for the EU’s zero tariff to combat the high number of electric batteries and parts being imported from Asia.
As of December 2023, however, this is set to end – which carmakers has said will see prices shoot up to go electric.
There has been a large delay in EV production in the last year, due to a shortage of semiconductors, which is why the car manufacturers are asking for an extension to catch up.
EVs being exchanged between the UK and Brussels would be subject to a minimum 10% tariff if the exemption is lifted – and this will be shifted onto consumers.
To qualify for the exemption, a maximum of 45% of the parts used to build the EV can be from outside of Europe – which has only grown with the shortage in materials.
A spokesperson for the representative body of EU carmakers, European Automobile Manufacturers Association, said: “Given the recent spike in prices of raw materials — which make up most of the non-European content of a battery — it is becoming increasingly challenging to meet the rules of origin for batteries.
“If the batteries do not meet the rules, then it is virtually impossible that the electric car itself will, as batteries make up 30-45% of the total price of an electric car.”
The current changes will see this increase from a maximum of 45% parts made in Europe to 70% from 2024 to 2027. If this level is exceeded, the 10% tariff will have to be paid.
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